Business
Business, 25.02.2020 18:51, shetherealbrat

Stephen plans to retire in twenty years at age sixty seven, at which time he will be in the 24 percent marginal income tax bracket. He is considering the purchase of a $200,000 face value whole life policy. The annual premium is $4,000. Alternatively, he is thinking that he could buy a twenty-year $200,000 face value term policy for $500 per year.
If he implements a buy term and uses ‘the invest the difference’ strategy, and can earn 8 percent annually in a Roth IRA (assume he saves annually for twenty years), how much will be in his account when the term policy expires?

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Answers: 3

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