If the inflation rate was 10%, and the tax rate was 25%, and you deposited money in a bank account that paid 14%, what is after tax real interest rate? Show you work
The after- tax nominal interest rate is 14% - 14%x.25 = 10.5%.
The after- tax real interest rate is 10.5% - 10% = .5%.
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a. True b. False Indicate whether the statement is true or false
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