Final answer:
Wahid can invest a maximum of $27,830 in his RRSP for 2023 (c). This figure is reached by applying 18% of his earned income from the previous year and then subtracting his pension adjustment, but not exceeding the annual RRSP contribution limit.
Step-by-step explanation:
The question asks how much Wahid can invest in his Registered Retirement Savings Plan (RRSP) in 2023, given his earned income in 2022 and the pension adjustment. To calculate the RRSP contribution room, we use a specific percentage of the previous year's income, which is 18%, minus any pension adjustments. As for 2022, the maximum contribution limit is set at $27,830; this would only be lower if 18% of the previous year's income is less than the maximum.
Following this, Wahid's maximum RRSP contribution for 2023 can be calculated as follows:
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- 18% of $250,000 earned income = $45,000
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- Minus pension adjustment of $12,000 = $33,000
However, since the maximum limit for RRSP contributions in 2023 is $27,830, and the theoretical calculation ($33,000) exceeds this limit, Wahid is restricted to the maximum cap. Thus, the most Wahid can invest in his RRSP for 2023 is $27,830.