Suppose one year ago the price index was 120 and Maria purchased $20,000 worth of bonds. One year later the price index is 126. Maria redeems her bonds for $22,700 and is in a 40 percent tax bracket. What is Maria?s real after-tax rate of interest to the nearest tenth of a percent?

Question 10 options:

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a)	2.4 percent.

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b)	2.1 percent.

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c)	5.1 percent.

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d)	3.1 percent.

Hide hint for Question 10
Hint: Use the equation rat = i(1-T) ?  The right answer is 3.1% but I would like to know the steps to get this answer

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct answer is 51 perc... View the full answer