Under a Court-Ordered Decree of Separate Maintenance Executed in 2015

question 3

Multiple Choice

Under a court-ordered decree of separate maintenance executed in 2015, Rebecca is required to pay her ex-husband, Carl, $4,750 a month until their youngest son turns age 18. At that time, the required payments are reduced to $2,100 per month. How much of each payment is deductible by Rebecca as alimony for 2015?

• A) $6,850.
• B) $4,750.
• C) $2,100.
• D)$0.

---

Definitions:

Compounded Annually

This term describes interest on an investment that is calculated once a year, where the interest added also earns interest in subsequent years.

Withdrawals

Money taken out from a business by its owners for personal use.

Compound Interest

Interest calculated on the initial principal as well as the accumulated interest of previous periods of a deposit or loan.

Annual Payments

Regular payments made once a year, often used in the context of loans, insurance, or annuities.