If you buy a municipal bond for $10,000 with an interest rate of 4% and hold it to its maturity date in 10 years,what amount will you receive back when the bond comes due in 10 years,and how much Federal Income tax will you pay (assuming that you are in the 25% bracket) ?
A) $10,000; $0
B) $10,000; $2,500
C) $14,000; $1,000
D) $15,500; $0
Correct Answer:
Verified
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