You earned a 6 percent nominal return last year and the inflation rate was 4.5%. If you were subject to a federal tax rate of 21 percent and a state tax rate of 7 percent, what was your real after-tax return? A. 1.5% B. 1.08% C. -0.18%
You earned a 6 percent nominal return last year and the inflation rate was 4.5%. If you were subject to a federal tax rate of 21 percent and a state tax rate of 7 percent, what was your real after-tax return? A. 1.5% B. 1.08% C. -0.18%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![You earned a 6 percent nominal return last year and the inflation rate was 4.5 % . If you were subject to a federal tax rate of 21 percent and a state tax rate of 7 percent, what was your real after - tax
return? A. 1.5% B. 1.08% C. - 0.18%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F34e0521a-0bff-4d2e-8d0a-c28591f59866%2F4c2c6999-cfdc-444a-a02b-ac9c347891f8%2Fetq06mf_processed.png&w=3840&q=75)
Transcribed Image Text:You earned a 6 percent nominal return last year and the inflation rate was 4.5 % . If you were subject to a federal tax rate of 21 percent and a state tax rate of 7 percent, what was your real after - tax
return? A. 1.5% B. 1.08% C. - 0.18%
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