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4. You have deposited $5,000 in a bank for 3 years which pays an annual interest of 6%. No money is withdrawn from the account

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4. You have deposited $5,000 in a bank for 3 years which pays an annual interest of 6%. No money is withdrawn from the account over this period. The average inflation during this period is 4%. Fill up the following table to determine after tax, inflation-adjusted cash flow for this investment. Assume that you are in a 22% marginal tax bracket. Note that you have to pay income tax on each year's interest posted by the bank. 8 Yr. Before Tax cash flow Income tax After tax cash flow Inflation adjusted, after tax cash flow

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