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Mary bought a bond a debt security for $2,500 with a nominal interest rate of 5 percent. If the inflation rate is 4 percent and

Mary bought a bond a debt security for $2,500 with a nominal interest rate of 5 percent. If the inflation rate is 4 percent and Mary must pay 30 percent of her income in taxes, her after-tax nominal interest income is .

A)

$87.50

B)

$22.50

C)

$37.50

D)

$48.50

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