McGraw-Hill's Taxation of Individuals 3rd Edition by Brian Spilker,Benjamin Ayers,John Robinson,Edmund Outslay ,Ronald Worsham,John Barrick,Connie Weaver

Exercise 23

Anne's marginal income tax rate is 30 percent.She purchases a corporate bond for $10,000 and the maturity, or face value, of the bond is $10,000.If the bond pays 5 percent per year before taxes, what is Anne's annual after-tax rate of return from the bond if the bond matures in one year What is her annual after-tax rate of return if the bond matures in 10 years