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4. Vivian has $500,000 to invest in a bond fund. A taxable fund is expected to have a return of 6.00% and a non-taxable fund
4. Vivian has $500,000 to invest in a bond fund. A taxable fund is expected to have a return of 6.00% and a non-taxable fund is expected to have a return of 4.50%. Calculate the after-tax income for each income tax rate below. Taxable bond fund Non-taxable bond fund Tax rate 20% 25% 45% a Assume Vivian is in the 20% tax bracket. Calculate the tax revenue to the government. b. Assume the government raises tax rates so that Vivian is in a 45% tax bracket. i. Calculate the amount of increase or decrease in Vivian's after-tax income
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