Hey guys. I am having a really hard time doing this Tax question. I know it has to do with the net accumulated funds compounded 30 years, however, I dont really know where to go from there. If anyone can help me with this question, it would be greatly appreciated.
An individual has the option to receive a $1000 annual bonus and invest the after-tax amount for 30 years, or receive $1000 per annum in a registered pension plan for the next 30 years. Assuming a constant rate of return of 8% and a tax rate of 30%, what will be the total after-tax difference between the two plans? Show all of your work.
I have the answer to the same question, but instead they use 25 years and a tax rate of 40%. I have attached the question with the answer here. Basically, I would need to know how to do it in the same format, but using 30 years and tax rate of 30%.