1. You have accepted a new job with a starting salary of $50,000. You plan to contribute 5% to your company-sponsored 401k Plan – which is the amount that your employer will match. You are in the 30% tax bracket. Calculate your “employee’s cost” for this Year 1 contribution.
A. Can not be determined.
B. $2,800
C. $4,200
D. $1,750
2. If a bond has an 8 % coupon (annual payments) rate, a 4-year maturity, and similar bonds are selling for an 11 % yield, what is the price of the bond?
A. $1,000.00
B. $ 910.35
C. $ 906.93
D. $ 880.22