Hot answers tagged


So this is what he has done: Take pre-tax investment of $1. At 25% tax rate, 0.75 goes into the retirement account, which grows at 15% for 30 years: $ 0.75*1.15^{30}=50 $ Then he applies the formula he has given just above the snapshot to compute the incremental amount: $0.25*(1-0.25)*\left(1.15^{30}-1\right)=0.25×0.75×(1.15^{30}−1)=12$ And adding ...

Only top voted, non community-wiki answers of a minimum length are eligible