Jackson Inherited $50,000 at the Age of 42 and Had

question 16

Essay

Jackson inherited $50,000 at the age of 42 and had a decision to make.He could deposit the money in a tax -deferred account that pays 3.375% compounded quarterly or he could deposit the money in a taxable account with the same interest rate and compounding period.Jackson's current tax bracket is 25%,which means he will have to pay taxes on the interest earned each year in the taxable account.How much money could Jackson have saved after 25 years if his decision was to deposit the inheritance into the taxable account?

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