Richard charges $1,500 on his bank-issued credit card after getting his car repaired. This is the...

 

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Richard charges $1,500 on his bank-issued credit card after getting his car repaired. This is the only transaction on his credit card and he carries this balance for one year, at an interest rate of 18%. If Richard has a combined marginal tax rate of 40%, how much does he need to earn in before-tax dollars to pay for the interest on his charge? Richard charges $1,500 on his bank-issued credit card after getting his car repaired. This is the only transaction on his credit card and he carries this balance for one year, at an interest rate of 18%. If Richard has a combined marginal tax rate of 40%, how much does he need to earn in before-tax dollars to pay for the interest on his charge?