Question
decided to invest in the Bank of America in a $ 10,000 certificate of deposit for 5 years that pays an interest rate of 3.5%
decided to invest in the Bank of America in a $ 10,000 certificate of deposit for 5 years that pays an interest rate of 3.5% annually (simple interest). Suppose that the interest payment is sent annually to your home by check and that this money is taxable. When the certificate matures, he will receive his $ 10,000 back (non-taxable amount). Wesley's marginal tax rate is 24% and headline inflation is expected to be 2% per year.
Determine for this investment instrument: (a) The rate of return before tax, ignoring inflation. (b) The rate of return after tax, ignoring inflation (c) The rate of return after taxes, considering inflation You must use Excel to solve these problems and display all your computations. Include comments and annotations when you deem it necessary (for example, to make a presumption).
Please help me and use Excel only and it's functional functions please. Thanks a lot!
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