Calculate the taxable interest rate that will provide the equivalent after-tax return in the cases that follow.
Enter your answers as a percentage, rounded to two decimal places. For example, .02368 would be rounded to .0237 and entered as 2.37.
1. A taxpayer is in the 28 percent tax bracket and invests in a San Diego City Bond paying 7 percent. What taxable interest rate will provide the same after-tax return?
2. A taxpayer is in the 33 percent tax bracket and invests in a New York State Bond paying 6.5 percent. What taxable interest rate will provide the same after-tax return?