The interest on some municipal bonds is tax free, in contrast to the interest on corporate bonds. If the current annual interest
rates on otherwise similar(i.e., maturity, credit risk, liquidity) municipal and corporate bonds are 1.48\%1.48% and 1.80\%1.80%, respectively, what is the implied tax rate?
1 answer:
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Answer:
insurance company will pay $75 to Alfred.
Explanation:
given data
Actual cost of camera = $200
Alfred cost of camera = $150
Life expectancy = 6 years
solution
we get here first Remain life of camera that is
Remain life of camera = 6 years - 3 years
Remain life of camera = 3 years
and
now we get here current cost of the camera that is
current cost of camera = Alfred cost of camera × (Remain life of camera ÷ Life expectancy) ........................1
put here value and we get
Current cost of camera = $150 ×
Current cost of camera = $75
so that insurance company will pay $75 to Alfred.