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:

Profits and Losses

Financial gains when revenues exceed expenses or financial losses when expenses surpass revenues, respectively.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Future Value

The value of a current asset at a future date based on an assumed rate of growth over time.

Free-Land Era

A historical period characterized by the availability and acquisition of land for free or at minimal cost, often associated with westward expansion in the United States.