Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
Assuming a 1-year, money market account investment at
2.282.28
percent (APY), a
1.391.39
percent inflation rate, a
2525
percent marginal tax bracket, and a constant
$50 comma 00050,000
balance, calculate the after-tax rate of return, the real rate of return, and the total monetary return. What are the implications of this result for cash management decisions?Question content area bottom
Part 1
Assuming a 1-year, money market account investment at
rate of return is
2.282.28%
(APY), a
2525%
marginal tax bracket, and a constant
$ 50 comma 000$50,000
balance, the after-tax 1.711.71%.
(Round to two decimal places.)Part 2
Assuming a 1-year, money market account investment at
2.282.28%
(APY), a
2525%
marginal tax bracket, and a constant
$ 50 comma 000$50,000
balance, the after-tax monetary return is
$855855.
(Round to the nearest dollar.)Part 3
Given an after-tax return of
1.711.71%
and an inflation rate of
1.391.39%,
the after-tax real rate of return is
enter your response here%.
(Round to two decimal places.)SAVE
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