BU353 Lecture 12: BU353 LECTURE NOTE 12
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Hint for insurance assignment 4: 890/900 = 0, +c2& / &b2& = &c2/b2. Lecture slide p. 19 example: after tax & medical bene ts income = 38000(1-0. 28)-2000 = 25360, medical bene ts provided by employer, after tax income = 36000(1-0. 28) = 25920: half cost covered by the employer, after tax & medical bene ts = (37000-1000)(1-0. 28) = 25920. Lecture slide p. 20 example: after tax & medical bene ts income = 38000(1-0. 28)-2200 = 25160. In a non registered plan, funds accumulate at after tax rate 8%(1-0. 3) = 5. 6%, after tax contribution today solves: x(1. 056)^10 = 9067. 80 x = 5258. 52. In before tax income this is 5258. 52/(1-0. 3) = 7512. Wednesday, 19 july 2017: outside of plan: 1(1-t)[1+r(1-t)]^n b. In rrsp [1(1+r)^n](1-tn), typically t0> tn: tfsa: 1(1-t0)(1+r)^n. Lecture slide p. 15 example: scenario 1: Pension = 0. 2*25*6000 = 3000, replacement rate = 50%, back loading of bene ts: scenario 2:
