Case One Marsha Had Total Income of $112,000 and Earned Income of Income

question 1

Essay

Case One
Marsha had total income of $112,000 and earned income of $75,000 in 2013.At the end of 2013,she had unused RRSP contribution room of $12,000.Her pension adjustment from 2013 was $5,000.She anticipates a pension adjustment of $7,000 in 2014.
Required:
Calculate the maximum RRSP deduction that Marsha can make for the 2014 taxation year.
Case Two (Independent of Case One)
Marsha is 35 years old.She has the option of investing $2,000 per year in a savings account at 8%,or $2,000 in an RRSP at 8%.The money will be invested for the next 30 years,and will not be withdrawn until she retires.
Required:
Calculate the amount of each option,net of taxes,if Marsha withdraws all of the money when she turns 65? Assume that her tax rate will be 35% every year until she retires.

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Definitions:

Technology Response

The way individuals, groups, or societies react and adapt to technological innovations and changes.

Correspondent Inference

Correspondent inference is a theory in social psychology that explains how individuals infer the disposition or traits of others from their observed behavior, especially when their actions are freely chosen.

External Attribution

The process of attributing the cause of a behavior or event to situational factors outside the control of the individual.

Availability Heuristic

A cognitive heuristic that depends on readily accessible examples in an individual's memory when assessing a particular subject, idea, technique, or choice.