Knowee
Questions
Features
Study Tools

With reference to the case study:If Joe takes $490,000 from his superannuation and $540,000 from the marital assets, what would his income be per year if the cost to buy an annuity that pays $1,000 per month is $2,34500?

Question

With reference to the case study:If Joe takes 490,000fromhissuperannuationand490,000 from his superannuation and 540,000 from the marital assets, what would his income be per year if the cost to buy an annuity that pays 1,000permonthis1,000 per month is 2,34500?

🧐 Not the exact question you are looking for?Go ask a question

Solution

To calculate Joe's annual income, we need to consider both his superannuation and marital assets, as well as the cost of the annuity.

  1. First, let's calculate how much money Joe has in total. He has 490,000fromhissuperannuationand490,000 from his superannuation and 540,000 from the marital assets. So, his total assets are 490,000+490,000 + 540,000 = $1,030,000.

  2. Next, let's calculate how many annuities Joe can buy. The cost of one annuity is 234,500.So,Joecanbuy234,500. So, Joe can buy 1,030,000 / $234,500 = approximately 4.39 annuities. However, since Joe can't buy a fraction of an annuity, we'll round this down to 4 annuities.

  3. Each annuity pays 1,000permonth.So,ifJoebuys4annuities,he′llreceive4∗1,000 per month. So, if Joe buys 4 annuities, he'll receive 4 * 1,000 = $4,000 per month.

  4. To calculate Joe's annual income, we multiply his monthly income by 12 (the number of months in a year). So, Joe's annual income would be 4,000∗12=4,000 * 12 = 48,000.

Therefore, if Joe takes 490,000fromhissuperannuationand490,000 from his superannuation and 540,000 from the marital assets, and if the cost to buy an annuity that pays 1,000permonthis1,000 per month is 234,500, his income per year would be $48,000.

This problem has been solved

Similar Questions

Flowers, a married taxpayer, purchased an annuity for $64,400 that will pay $700 per month over the life of Flowers and Flowers’s spouse. At the time of purchase, the couple’s joint life expectancy was 23 years. Flowers received payment beginning April 1, Year 1, amounting to $6,300 in the first year of the annuity contract. How much is includible in Flowers’s gross income in the first year?

Barbara Murphy invested $3000 four times a year in an annuity due at Southern Trust Company for a period of 4 years at an interest rate of 8% compounded quarterly. Using the ordinary annuity table, calculate the total value of the annuity due at the end of the 4-year period.$

Suppose the interest rate is 9% APR with monthly compounding. Then the present value of an annuity that pays $250 every three months for the next five years is closest to:a.$4150.b.$2280.c.$3990.d.$3985.e.$3995.

If the payment of ₹2,000 is made at the end of every quarter for 10 years at the rate of 8% per year, then find the amount of annuity.

Suppose that on 1 January and on 1 July each year for the next 20years, James will pay ✩200 into the investment account of a company.In return, the company will pay James a monthly annuity (with allmonthly payments being the same) for 15 years. The first annuitypayment is made on the 1 January following James’ final payment of✩200.(a) Find the amount of the monthly annuity payment assuming a(nominal) compound interest rate of 12% per annum, compounding monthly.(b) Suppose instead that the monthly annuity commences one monthafter the final payment of ✩200. Find the revised monthly annuitypayment. Continue to assume a (nominal) compound interest rateof 12% per annum, compounding monthly.

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.