Last year you bought a house for $200,.000, and you sell the house this year for $230.000, Unfortunately, the government makes you pay taxes on your capital gains. Assume that the capital gains tax rate is 20%. Over the year, the CPI increased from 110 to 115.5. Your after-tax real return is

Last year you bought a house for $200,.000, and you sell the house this year for $230.000, Unfortunately, the government makes you pay taxes on your capital gains. Assume that the capital gains tax rate is 20%. Over the year, the CPI increased from 110 to 115.5. Your after-tax real return is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Last year you bought a house for $200,000, and you sell the house this year for $230.000. Unfortunately, the government makes you
pay taxes on your capital gains. Assume that the capital gains tax rate is 20%. Over the year, the CPl increased from 110 to 115.5.
Your after-tax real return is
%.
See Hit
Part 2 (1 point)
%
Suppose that the CPI increased from 110 to 121. What is your after tax real return now?

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