Sylvia Makes a One-Time $2,000 Deductible Contribution into a Deductible

question 34

Multiple Choice

Sylvia makes a one-time $2,000 deductible contribution into a deductible traditional IRA account,which will earn 8% annually before taxes.Twenty-five years later,at age 65,she withdraws all of the accumulation from the IRA when she is in the 15% marginal tax bracket.What is the total of her after-tax accumulated proceeds from the IRA?

• A)$6,000
• B)$8,541
• C)$11,642
• D)$13,697

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Definitions:

Nonrival

A characteristic of a good or service where one person's use does not diminish its availability to others.

Marginal Cost

The increase in total production cost that arises from producing one additional unit of a good or service.

Public Good

A product or service that is provided without profit to all members of a society, either by the government or a private individual or organization.

Nonexcludable

A characteristic of a good where it is not possible to prevent individuals from accessing or consuming the good.