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Accumulated Value Contribution Plan

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What is the accumulated value of a $1,000 contribution to a qualified defined contribution plan under each of the circumstances described in the table below?

Tax Rate(%) Before-tax rate of return (%) Investment period
10 8 5 years
30 8 5 years
30 4 5 years
30 4 10 years

Suppose instead that the $1,000 is paid to an employee who then invests the funds in a nonqualified account. What is the accumulated value under EACH of the circumstances in the table?

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Solution Summary

The expert examines accumulated value of a contribution plan.

Solution provided by:
Robert Reinhart, MBA
Education
  • MBA, Merage School of Business, Univ of Cal, Irvine
  • BA, Univ of Cal, Irvine
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