Jewels can expect a total of $17,125 + $29,000 = $46,125 in student loans when she graduates from her master’s program. At an 8 percent rate of interest, the yearly interest charges will be $3,690 immediately after she graduates (though they will go down once she starts paying off some of the principal). Since the yearly interest will be more than the allowable $2,500 deduction, we can express her after-tax interest rate(with a tax-rate of 22 percent) as the following weighted average: Multiple Choice 2.50 percent 8.00 percent 3.23 percent 6.81 percent
Jewels can expect a total of $17,125 + $29,000 = $46,125 in student loans when she graduates from her master’s program. At an 8 percent rate of interest, the yearly interest charges will be $3,690 immediately after she graduates (though they will go down once she starts paying off some of the principal). Since the yearly interest will be more than the allowable $2,500 deduction, we can express her after-tax interest rate(with a tax-rate of 22 percent) as the following weighted average: Multiple Choice 2.50 percent 8.00 percent 3.23 percent 6.81 percent
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Jewels can expect a total of $17,125 + $29,000 = $46,125 in student loans when she graduates from her master’s program. At an 8 percent rate of interest, the yearly interest charges will be $3,690 immediately after she graduates (though they will go down once she starts paying off some of the principal). Since the yearly interest will be more than the allowable $2,500 deduction, we can express her after-tax interest rate(with a tax-rate of 22 percent) as the following weighted average:
Multiple Choice
2.50 percent
8.00 percent
3.23 percent
6.81 percent
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