Heidi invests $1,000 in a taxable bond for 5 years that earns 4% interest per year. Her marginal tax rate is 15%. What is her after-tax accumulated investment at the end of year 5 (assume that bond interest is reinvested at the same rate)?
A) $1,182
B) $1,143
C) $1,020
D) $1,762
A) $1,182
ATA = AT$ [1 + R(1 - t)]n, $1,182 = $1,000 [1 + .04(1 - .15)]5
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