Problem $1-45($LO $1-3,$ LO $1-4)($Algo$)$

Fergie has the choice between investing in a State of New York bond at $5\mathrm{.}6$ percent and a Surething Incorporated bond at $8\mathrm{.}6$ percent. Assuming that both bonds have the same nontax characteristics and that Fergie has a $30$ percent marginal tax rate, in which bond should she invest?

Fergie should invest in the