In 2014, Billie Decides to Purchase a House by Withdrawing

question 86

Multiple Choice

In 2014, Billie decides to purchase a house by withdrawing $15,000 from his IRA. Brandan qualifies as a first-time home- buyer. The $15,000 consists of $12,600 in nondeductible contributions and $2,400 in income earned on the plan's assets. Billie will have to pay an early withdrawal penalty of

• A) $-0-
• B) $240
• C) $500
• D) $1,260
• E) $1,500

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.

Rational

Related to decision-making, denotes behavior in accordance with logic or reason, where choices are made to maximize self-interest or outcome.

Inelastic

Characterizing a situation where a change in price leads to a relatively small change in the quantity demanded or supplied.

Share of Income

The portion of total income (either personal or national) that is received by an individual, household, or socioeconomic group.