CFP.14.1

Your client federal marginal tax rate is 36%, and the state marginal rate is 7%. The client does not itemize deductions on his federal return and is considering investing in a municipal bond issued in his state of residence thet yields 5%. What is the adjusted taxable equivalent yield?

On Fri, Feb 27, 2015 at 3:30 PM, saud B . M wrote:

Buy Proposal
	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6
Down payment	$ 25,000
Interest	$ 7,500	$ 7,500	$ 7,500	$ 7,500	$ 7,500	$ 7,500
Annual Maint.	$ 2,000	$ 2,080	$ 2,163	$ 2,250	$ 2,340	$ 2,433
Property tax	$ 3,000	$ 3,120	$ 3,245	$ 3,375	$ 3,510	$ 3,650
Insurance	$ 1,000	$ 1,040	$ 1,082	$ 1,125	$ 1,170	$ 1,217
Total	$ 13,500	$ 13,740	$ 13,990	$ 14,249	$ 14,519	$ 14,800
Net of tax	$ 9,450	$ 9,618	$ 9,793	$ 9,974	$ 10,163	$ 10,360
Selling value						$ (158,165)
Net Cash outflows	$ 34,450	$ 9,618	$ 9,793	$ 9,974	$ 10,163	$ (147,805)
IRR	20%