Consider Andy who bought a corporate AAA bond $4$ years ago with a face value of $$5,800,$ a coupon rate of $3\mathrm{.}25\%,$ and $7$ years to maturity. In he was in the $32\%$ tax bracket. Due to a risky investment in Bitcoin, his wealth rose brining him up to the $40\%$ tax bracket in $2022.$ He no longer want his cash to be tied up in bonds, so he will sell the bond next year. What will be his rate of return? Suppose that he paid $$4,500$ for the bond, and a constant interest rate of $5\%.$ Hint: only coupon payments and capital gains are taxed