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in a savings account at 8%,or $2,000 in an RRSP at 8%.The money will be invested for the next 30 years,and will not be withdrawn until she retires.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.