Tax deferred annuities pay no taxes on the income placed

Last updated: 10/2/2023

Tax deferred annuities pay no taxes on the income placed into the account but then pay taxes on all the money when it is withdrawn Nondeferred plans pay taxes on the income prior to depositing the money into the account and then only pay taxes on the interest earned by the account The table below shows the amount set aside in an ordinary annuity each month the c tax rate the number of years that contributions will be made to the annuity and the tax rate when withdrawals from the annuity are made Complete parts a through c Current Tax Future Tax Rate Rate 21 21 Monthly Number of Annual Interest Years Payment 300 35 Rate 5 a Find the value of the tax deferred and the nondeferred accounts The future value of the tax deferred account is The future value of the nondeferred account is Round the final answer to two decimal places as needed Round all intermediate values to six decimal places as needed