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1. Key in the program.
2. Press CLEAR and press .
3. Key in the tax rate as a percentage and press 1.
4. Key in years to retirement and press .
5. Key in the interest rates as a percentage and press .
6. Key in the annual payment and press .
7. Press to calculate the future value of the tax free investment.
8. Press to compute the total cash paid in.
9. Press to compute the total dividends paid.
10. Press to compute the future value when, after retirement, money is
withdrawn at a rate causing the tax rate to equal 1/2 the rate paid during
the pay in period.
11. Press to compute the diminished purchasing power, in terms of
today's dollars, of the future value assuming a 10% annual inflation rate.
12. Press to compute the future value of an ordinary tax investment.
13. Press to compute the diminished purchasing power of the ordinary
tax investment.
Example: Assuming a 35 year investment period with a dividend rate of
8.175% and a tax rate of 40%.
1. If you invest $1500 each year in a tax free account, what will its value be at
retirement?
2. How much cash will be paid in?
3. What will be the value of the earned dividends?
4. After retirement, if you withdrew cash form the account at a rate such that
it will be taxed at a rate equal to one-half the rate paid during the pay-in
period, what will be the after-tax value?
5. What is the diminished purchasing power of that amount, in today's
dollars, assuming 10% annual inflation?
REGISTERS
n: Years i: Used
PV: 0 PMT: Yearly Pmt
FV: Used
R
0
: Unused
R
1
: Tax % R
2
-R
.5
: Unused