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Ket [755]
4 years ago
13

You put money into an account that earns a 5 percent nominal interest rate. The inflation rate is 2 percent, and your marginal t

ax rate is 40 percent. What is your after-tax real rate of interest
Business
1 answer:
spayn [35]4 years ago
4 0

Answer: 1%

Explanation:

The Nominal interest rate has not been adjusted for inflationary effects yet and as such is considered overstated.

The Real Interest rate has been adjusted for inflation and is believed to show the actual return one receives.

Tax is calculated on the Nominal rate.

After tax Nominal Rate = 5% * ( 1 - 40%)

= 3%

Then adjust for inflation to find real rate,

= 3% - 2%

= 1%

The After-tax real rate is 1%.

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Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. its
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6 0
1 year ago
List which coins are profitable and which are not.
sergeinik [125]
What are the options and I’ll tell you when you comment on mine when
6 0
3 years ago
Kenji has had an illness and an accident during the year. His combined out-of-pocket expense for both incidents was $1,000. The
AfilCa [17]

Answer:

b. Deductible

Explanation:

Since in the question it is mentioned that Kenji who had an illness and had an accident during the year also the combined out of pocket expenses is $1,000.

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hence, the correct option is b.

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7 0
3 years ago
If the money supply is MS2 and the value of money is 5, then the quantity of money an. demanded is greater than the quantity sup
nlexa [21]

Answer:

If the money supply is MS2 and the value of money is 5, then the quantity of money

a. demanded is greater than the quantity supplied; the price level will rise.

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If the money supplied is greater than the quantity demanded; the price level will fall.  The quantity theory of money, popularized by Irving Fisher but developed by John Maynard Keynes, states that the value of money is influenced by the forces of demand and supply.  This theory implies that money supply and price level proportionally influence each other.

3 0
3 years ago
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