The nominal interest rate is 12%, inflation is 3%, the marginal income tax rate is 10%. What

Fantastic news! We've Found the answer you've been seeking!

Question:

The nominal interest rate is 12%, inflation is 3%, the marginal income tax rate is 10%. What is after-tax real rate of interest?

Answer with one decimal place

Related Book For answer-question

Public Finance

ISBN: 978-0078021688

10th edition

Authors: Harvey Rosen, Ted Gayer

See More Books

Posted Date: May 08, 2024 09:18 PM

See More Questions

1. In the classical model, it is thought that the long-run: A. and short-run aggregate supply curves are both upward sloping. B. aggregate supply curve is vertical and the short-run aggregate supply...
Suppose that a typical taxpayer has a marginal personal income tax rate of 35 percent. The nominal interest rate is 13 percent, and the expected inflation rate is 8 percent. a. What is the real...
ABC Company has the following mutually exclusive projects. If the company's payback period is 2 years, which of these projects should be chosen? Project A Year 0 -19,500 1 11,500 2 8,750 3 2,500...
Use the remainder term to estimate the maximum error in the following approximations on the given interval. Error bounds are not unique. In (1 + x) = x - x/2; [-0.2, 0.2]
1. U.S. courts sometimes appoint advisors (often called Special Masters) to help them decide cases that involve complex business or technical issues. Assume you are a business advisor to a court that...
Suppose that the industrial engineers are able to increase the average utilization rate of the CVD tool from 80% to 90%. What is the projected impact of this 10% increase on the PW of the project?
How can a buyer be protected against any hidden liabilities and debts that the target may have?
Jacobson Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2012. The bonds pay interest twice a year. Instructions (a) (1) Prepare the journal entry to record the issuance of the bonds....
A company designs a logo using a kite figure aroun letter t. The logo is 12 centimeters wide and 16 centimeters What is the area of the logo? 48 sq. cm 96 sq. cm O144 sq. cm O 192 sq. cm
:Under the following assumptions Investment at year 0 of 3.000 M (asset value) Amortization (D&A): 3 years with a fixed value Investment and project life 3 years (years 0 of investment + 3 years)...
How does the data model determine which table is the date table?
Distinguish the primary functions of human resource management within the long term care industry. Evaluate the applicable federal and state laws, rules, regulations, and requirements in terms of...
Define target market . Define customer value . Write in one paragraph what do you think is the future of Marketing . Provide a marketing mix for a new product and the marketing campaign. Define...
Planning and Participating in Face-to-Face and Virtual meetings As you prepare to join the workforce, expect to attend meetingslots of them! Estimates suggest that workers on average spend four hours...
Define privatization in government. Is it a good move for government? What would be better for an entity that cannot be "full service"--privatization or municipal contracting? Give examples.
A young, investing-savvy artist plans to retire in 30 years and is planning to save $1,000 every month. They plan to deposit the money at the beginning of each month into an account paying 5%...
Question 6.10 Current and deferred tax worksheets and tax entries From the hip Ltd?s statement of profit or loss for the year ended 30 June 2007 and extracts from its statements of financial position...
Forward Quotes. FXStreet foreign exchange services provides representative forward rates on a multitude of currencies online. Use the following Web site to search out forward exchange rate quotations...
Bank of Canada Exchange Rate Index (CERI). The Bank of Canada regularly publishes an index of the Canadian dollars value, the CERI. The CERI is a multilateral trade-weighted index of the Canadian...
Daily Market Commentary. Many different online currency trading and consulting services provide daily assessments of global currency market activity. Use the following GCI site to find the markets...

The nominal interest rate is 12%, inflation is 3%, the marginal income tax rate is 10%. What

Question:

Expert Answer:

The aftertax real rate of interest can be calculated using the following formul... View the full answer

Public Finance

Students also viewed these finance questions