More than $50,000$ state and local governments and their agencies borrow money by issuing municipal bonds to build, repair, or improve schools, streets, highways, hospitals, sewer systems, and so on$.$ When the federal income tax law was adopted in $1913,$ interest on municipal bonds was excluded from federal taxation. As a result, municipal bond investors are willing to accept lower yields than those they can obtain from taxable bonds.

As part of your portfolio, you are considering investing $$60,000$ in bonds. You have the choice of investing in tax$-$exempt municipal bonds yielding $2\mathrm{.}75\%$ or corporate bonds yielding $4\%$ in taxable interest income.

$($a$)$

What is the annual interest income $($in $$)$ and tax status of the municipal bond investment?

$

$---$Select$---$

$($b$)$

What is the annual interest income $($in $$)$ and tax status of the corporate bond investment?

$

$---$Select$---$

$($c$)$

If you are in the $30\%$ marginal tax bracket for federal income taxes and your state and local taxes on that income amount to an additional $7\%,$ what is the after$-$tax income $($in $$)$ on the corporate bonds?

$

$($d$)$

What is the actual percent yield realized on the corporate bonds after taxes?

$\%$