document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1173295>Question 1173295</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28% federal income tax bracket. Each year you contribute $4,500 tax free to your individual retirement account, IRA. The account earns 7% annual interest. In addition, the amount of tax that you save each year by making these \"pre-tax\" contributions is invested in a taxable aggressive growth mutual fund averaging 17%.\r<BR>\n" );
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document.write( "How much tax do you save (in $) each year by making the retirement fund contributions?<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #850744 by </B><A HREF=/tutors/aboutme.mpl?userid=CPhill><B>CPhill(1959)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=CPhill><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=CPhill><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=850744\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> You save $1,260 each year by making the retirement fund contributions. Here's how to calculate that:\r<BR>\n" );
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document.write( "* **Contribution:** $4,500<BR>\n" );
document.write( "* **Tax Bracket:** 28%<BR>\n" );
document.write( "* **Tax Savings:** $4,500 * 0.28 = $1,260<BR>\n" );
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