MrGordon,a Resident of Pennsylvania,paid $20,000 for a Bond Issued by Delaware.This

Mr.Gordon,a resident of Pennsylvania,paid $20,000 for a bond issued by Delaware.This year,he received $800 of interest on the bond.His marginal state tax rate is 7%,and under Pennsylvania law,interest on debt obligations issued by another state is taxable.Mr.Gordon can deduct state income tax on his federal return,and his marginal federal tax rate is 35%.Compute his after-tax rate of return on the bond.

A) 4%
B) 3) 825%
C) 3) 725%
D) 2) 420%