Please review all of the course materials regardingFinancial Markets: Savings and Investment Vehicles before you beginthis assignment.  You will also need to reference the TaxCuts and Jobs Act of 2017.

The questions below also rely on the followingassumptions:

• You are 30 years old and your employer sponsors a401(k) plan with a 4% employer match.  
• You earn $100,000 of gross wage income. This income isexpected to stay constant over the next three years.
• At the start of every year you decide to invest 4% ofyour salary into your 401(k).
• Your expected return on your investments is 5% peryear.
• You file your taxes as a single filer and you are inthe 24% tax bracket.
• The long term capital gains tax is 15%.

A. Calculate the total amount of funds that you expect to be inyour 401(k) at the end of three years. Explain your answer.

B. At the end of the third year, you decide to withdraw $15,000from your 401(k) to pay for some home improvements. Calculate howmuch tax, if any, you will owe on this withdrawal. Explain youranswer.

C. During this same three year period you also invested in aRoth IRA. At the end of this three year period, your Roth IRA hadcumulative contributions of $15,000 and earnings or gains of$5,000.

Suppose you decided to fund your home improvements bywithdrawing from your Roth IRA instead of your 401(k). Calculatehow much tax, if any, would you owe in this withdrawal. Explainyour answer.