Need business and finance help to purchase a tax-free municipal bond

Anonymous
timer Asked: Nov 24th, 2015
account_balance_wallet $5

Question Description

If you purchase a tax-free municipal bond paying an annual rate of 6% what is the before tax rate if you are in the 15% tax bracket,  28% tax bracket,  36% tax bracket.

Tutor Answer

JamesM847
School: Duke University

Thank you for the opportunity to help you with your question!

15%, 

it is 6%/(1-0.15) = 7.06%

28%:

6%/(1-0.28) = 8.33%

36%:

6%/(1-0.36) =  9.375%

Please let me know if you need any clarification. I'm always happy to answer your questions.

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Anonymous
Top quality work from this guy! I'll be back!

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