54. TAXABLE EQUIVALENT YIELD Taxable equivalent yield mea-sures what you would have to earn on a taxable investmentto match the yield provided by a tax-exempt municipalbond. Suppose that your total tax rate is 7% and the statedinterest rate on a tax-exempt bond is r%/year. Then thetaxable equivalent yield, R%/year, is given byR =r1- Ta. Solve for r in terms of R and T.b. If your taxable return is 6%/year and your total taxrate is 20%, what rate of return on a tax-exempt secu-rity do you need to match the after-tax return on a tax-able security?

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Answered: 54. TAXABLE EQUIVALENT YIELD Taxable…

Algebra and Trigonometry (6th Edition)

6th Edition

ISBN:9780134463216

Author:Robert F. Blitzer

Publisher:Robert F. Blitzer

ChapterP: Prerequisites: Fundamental Concepts Of Algebra

Section: Chapter Questions

Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...

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Emma wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4=2.47% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation. (b) Assume that the fund's earnings rate rate has changed from j4=2.47% to j4=2.22% one year before the first scholarship payment. How much does Emma need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)? a. 120871.62 b. 117931.61 c. 116810.57 d. 113655.15
The monthly payment is $ enter your response here. (Round to the nearest cent as needed.)
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2. A loan Lis repaid using increasing payments. The first payment, made at t = 1, is of amount 200, and each subsequent payment increases by a factor of (1.05), with the last payment at t = t= 10, the borrower decides to make an additional payment of X, which allow him to halve the size of the remaining payments (t = 11, ., 20). Determine L and X if the effective interest is 8%. 20. However, at %3D
How much money will the Halls have to set aside each month so as to have enough saved up for a down payment on the $195,000 house within 3 years, if the savings can grow at 0.8%? Assume that the closing costs amount to 1.8% of the loan and the down payment is 20% of the house price. The halls also plan to use half of their savings balance toward the down payment. Price of House at today's dollar: Inflation: House price at the time of purchase: Down Pay: Down Payment: Closing Costs: Total Money needed for Down Payment and Closing Cost: Annual Rate of return on investments: Number of months until purchase of house: Deposits required to accumulate the down pmt and closing costs: Answer
Finance Suppose that the spot price of copper is $3.25 per pound, the continuously compounded lease rate for copper is 4%, and the continuously compounded risk-free rate is 2%. Suppose that copper can be stored at zero cost. a)lf you short sell copper for one year, what is the total cash flow(including both the cost of returning the copper borrowed and any lease payment) to the copper lender at the end of the year? b)What is the 1-year forward price of copper? c)lf there are no arbitrage opportunities, what is the maximum possible 1-year forward price for copper? If the forward price were above this level, how could you take advantage of it?
A house costs $150,000. The terms of the sale are 10% down payment and the remainder to be paid in monthly payments over 10 years at an annual rate of 4.25% compounded monthly.When15000 X 10/100 = 15000 the balance = 15000 – 15000 = $135,000 (P). You decide to pay an extra $50.00 per period as you pay back the loan. By doing this, you will decrease the loan duration by approximately 117 periods. In addition to paying an extra $50.00 per period as you pay back the loan, you decide to make an exrra payment of $5000 at fifth period. By doing this, you will decrease the original loan duration by approximately how many periods?
A loan of 500,000 is repaid with 12n equal end of month payments of X. The total amount of principal paid in the nth year is 51308. 042 53. The nominal rate of interest is 3.96% convertible monthly. Find the total interest paid during the life of the loan.
Compute the specified quantity. You are expecting a tax refund of $4,000 in 5 weeks. A tax preparer offers you an "interest-free" loan of $4,000 for a fee of $50 to be repaid by your refund check when it arrives in 5 weeks. Thinking of the fee as interest, what weekly simple interest rate would you be paying on this loan (as a percent)? What is the corresponding annual rate (as a percent)? weekly simple interest rate annual simple interest rate % %

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