Use the table for the question(s)below.
Suppose you have the following Loans/Investments
-If your income tax rate is 30%,then the after-tax return you receive on your money market fund is closest to:
A)3.7%.
B)5.1%.
C)3.6%.
D)4.2%.

Question

Use the table for the question(s)below.
Suppose you have the following Loans/Investments 
-If your income tax rate is 30%,then the after-tax return you receive on your money market fund is closest to:
A)3.7%. 
B)5.1%. 
C)3.6%. 
D)4.2%.

Quizplus · Accepted Answer

To find the after-tax return, multiply the pre-tax return by (1 - tax rate). Assuming a pre-tax return of 5.1%, the after-tax return is 5.1% * (1 - 0.30) = 3.57%, which is closest to 3.6%.

Use the Table for the Question(s)below