Paulette, a trial attorney for a corporation, was forced to leave the field due

Question

Paulette, a trial attorney for a corporation, was forced to leave the field due to an injury to her vocal chords. She switched careers and became a lower-paying author. Fortunately, she had three disability policies. Policy A had an own occupation definition that was paid for by her employer and was for $20,000 per year. Policy B, which she paid for, had an own occupation definition and was for $30,000 of coverage per year. Policy C, which also was purchased by her, had no own occupation definition and was for $60,000 in coverage per year. Paulettes marginal tax rate was 33 percent.

(Round your answers below to the nearest whole dollar. Omit the comma and "$" sign from your responses.)

(a) How many after-tax dollars did she receive per year from Policy A?

(b) How many after-tax dollars did she receive per year from Policy B?

(c) How many after-tax dollars did she receive per year from Policy C?

Explanation / Answer

Hi,

Please find the answer as follows:

Part A:

Per Year Benefit = 20000*(1-.33) = 13400

Part B:

Per Year Benefit = 30000 (no tax deducted on the benefit)

Part C:

Per Year Benefit = 60000*(1-.33) = 40200

Thanks.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects