The tax bracket or the Marginal tax rate at which the investor will be indifferent between the taxable bond and tax-exempt bonds. Introduction: Marginal tax rate: Income of individual is taxable if it crosses the limit imposed by the Government. So, Government decides some tax brackets which consist of tax percentages which will be imposed on tax payers if they qualify the income range. This tax percentage are called Marginal tax rate. Tax-exempt bond: An investor is given certain bonds stating the rate of interest payable to him for a fixed tenure. When a tax is not charged on the income of bond then it is called tax-exempt bond. Taxable bond: When an investors receives some bonds which as taxable under the Income tax laws approved by the Government, then these are called taxable bonds.

Question

find the balance after 7years if $55000 is invested at 6% p.a. compound annually

Answer 1

Question

Chapter 2, Problem 5CP

Summary Introduction

To calculate: The tax bracket or the Marginal tax rate at which the investor will be indifferent between the taxable bond and tax-exempt bonds.

Introduction:

Marginal tax rate: Income of individual is taxable if it crosses the limit imposed by the Government. So, Government decides some tax brackets which consist of tax percentages which will be imposed on tax payers if they qualify the income range. This tax percentage are called Marginal tax rate.

Tax-exempt bond: An investor is given certain bonds stating the rate of interest payable to him for a fixed tenure. When a tax is not charged on the income of bond then it is called tax-exempt bond.

Taxable bond: When an investors receives some bonds which as taxable under the Income tax laws approved by the Government, then these are called taxable bonds.

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Answer 2

Question

Chapter 2, Problem 5CP

Summary Introduction

To calculate: The tax bracket or the Marginal tax rate at which the investor will be indifferent between the taxable bond and tax-exempt bonds.

Introduction:

Marginal tax rate: Income of individual is taxable if it crosses the limit imposed by the Government. So, Government decides some tax brackets which consist of tax percentages which will be imposed on tax payers if they qualify the income range. This tax percentage are called Marginal tax rate.

Tax-exempt bond: An investor is given certain bonds stating the rate of interest payable to him for a fixed tenure. When a tax is not charged on the income of bond then it is called tax-exempt bond.

Taxable bond: When an investors receives some bonds which as taxable under the Income tax laws approved by the Government, then these are called taxable bonds.

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Answer 3

Question

Chapter 2, Problem 5CP

Summary Introduction

To calculate: The tax bracket or the Marginal tax rate at which the investor will be indifferent between the taxable bond and tax-exempt bonds.

Introduction:

Marginal tax rate: Income of individual is taxable if it crosses the limit imposed by the Government. So, Government decides some tax brackets which consist of tax percentages which will be imposed on tax payers if they qualify the income range. This tax percentage are called Marginal tax rate.

Tax-exempt bond: An investor is given certain bonds stating the rate of interest payable to him for a fixed tenure. When a tax is not charged on the income of bond then it is called tax-exempt bond.

Taxable bond: When an investors receives some bonds which as taxable under the Income tax laws approved by the Government, then these are called taxable bonds.

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Answer 4

Question

Chapter 2, Problem 5CP

Summary Introduction

To calculate: The tax bracket or the Marginal tax rate at which the investor will be indifferent between the taxable bond and tax-exempt bonds.

Introduction:

Marginal tax rate: Income of individual is taxable if it crosses the limit imposed by the Government. So, Government decides some tax brackets which consist of tax percentages which will be imposed on tax payers if they qualify the income range. This tax percentage are called Marginal tax rate.

Tax-exempt bond: An investor is given certain bonds stating the rate of interest payable to him for a fixed tenure. When a tax is not charged on the income of bond then it is called tax-exempt bond.

Taxable bond: When an investors receives some bonds which as taxable under the Income tax laws approved by the Government, then these are called taxable bonds.

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Answer 5

Chapter 2, Problem 5CP

Summary Introduction

To calculate: The tax bracket or the Marginal tax rate at which the investor will be indifferent between the taxable bond and tax-exempt bonds.

Introduction:

Marginal tax rate: Income of individual is taxable if it crosses the limit imposed by the Government. So, Government decides some tax brackets which consist of tax percentages which will be imposed on tax payers if they qualify the income range. This tax percentage are called Marginal tax rate.

Tax-exempt bond: An investor is given certain bonds stating the rate of interest payable to him for a fixed tenure. When a tax is not charged on the income of bond then it is called tax-exempt bond.

Taxable bond: When an investors receives some bonds which as taxable under the Income tax laws approved by the Government, then these are called taxable bonds.

Answer 6

Chapter 2, Problem 5CP

Summary Introduction

To calculate: The tax bracket or the Marginal tax rate at which the investor will be indifferent between the taxable bond and tax-exempt bonds.

Introduction:

Marginal tax rate: Income of individual is taxable if it crosses the limit imposed by the Government. So, Government decides some tax brackets which consist of tax percentages which will be imposed on tax payers if they qualify the income range. This tax percentage are called Marginal tax rate.

Tax-exempt bond: An investor is given certain bonds stating the rate of interest payable to him for a fixed tenure. When a tax is not charged on the income of bond then it is called tax-exempt bond.

Taxable bond: When an investors receives some bonds which as taxable under the Income tax laws approved by the Government, then these are called taxable bonds.

Answer 7

Chapter 2, Problem 5CP

Summary Introduction

To calculate: The tax bracket or the Marginal tax rate at which the investor will be indifferent between the taxable bond and tax-exempt bonds.

Introduction:

Marginal tax rate: Income of individual is taxable if it crosses the limit imposed by the Government. So, Government decides some tax brackets which consist of tax percentages which will be imposed on tax payers if they qualify the income range. This tax percentage are called Marginal tax rate.

Tax-exempt bond: An investor is given certain bonds stating the rate of interest payable to him for a fixed tenure. When a tax is not charged on the income of bond then it is called tax-exempt bond.

Taxable bond: When an investors receives some bonds which as taxable under the Income tax laws approved by the Government, then these are called taxable bonds.

Answer 8

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Ch. 2 - Prob. 1PS Ch. 2 - Prob. 2PS Ch. 2 - Prob. 3PS Ch. 2 - Prob. 4PS Ch. 2 - Prob. 5PS Ch. 2 - Prob. 6PS Ch. 2 - Prob. 7PS Ch. 2 - Prob. 8PS Ch. 2 - Prob. 9PS Ch. 2 - Prob. 10PS

Solution Summary: The author explains the Marginal Tax Rate and Tax-Exempt Bond, which are taxable under the Income Tax laws approved by the Government.

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