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Paul has $10,000 that he wishes to invest in bonds. He can purchase Treasury bonds with a coupon rate of 7% or municipal bonds with

Paul has $10,000 that he wishes to invest in bonds. He can purchase Treasury bonds with a coupon rate of 7% or municipal bonds with a coupon rate of 5.5 %. Paul lives in a state with no state income tax and has a marginal tax rate of 25%. Which investment will give Paul the higher annual interest after taxes are considered?

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