Sam borrowed $50,000 from her employer at an annual rate of 1% interest last year to cover her gambling debts. Assume that at the time the loan was made, the prescribed rate of interest was 3% and this rate has not changed. Sam is subject to a combined tax rate of 30 percent. What is the after tax cost of the loan to Sam for the current year? 

A. $300 

B. $500 

C. $800 

D. $1,500

Answer rating: 100% (QA)

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