I am a bit confused what it means to use composition of functions. How do i approach this problem? Am i supposed to plug it into an exponential decay fromula A(t)=A(1-r)^t?
Thank you.
PROBLEM:
Your pays you a starting salary of $65,500. Youcan invest 16.1% of your salary in your company’s 401K (i.e. retirement investment accounts). You also unfortunately make enough money to have to pay 47% in taxes. Your company gives you the option of deducting your retirement amount prior to paying taxe. At the end of each year you are employed. you receive a raise of 8.4%. You will be investing for 20 years.
QUESTION:
Determine which is the better deduction decision—a) having your retirement deducted prior to paying your taxes or b) paying your taxes first and then deducting your retirement.
--- You must show this mathematically.
--- You must use composition of functions to receive full credit
--- You must explain in words which is the better option and why.
Thank you.
PROBLEM:
Your pays you a starting salary of $65,500. Youcan invest 16.1% of your salary in your company’s 401K (i.e. retirement investment accounts). You also unfortunately make enough money to have to pay 47% in taxes. Your company gives you the option of deducting your retirement amount prior to paying taxe. At the end of each year you are employed. you receive a raise of 8.4%. You will be investing for 20 years.
QUESTION:
Determine which is the better deduction decision—a) having your retirement deducted prior to paying your taxes or b) paying your taxes first and then deducting your retirement.
--- You must show this mathematically.
--- You must use composition of functions to receive full credit
--- You must explain in words which is the better option and why.