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Paul has $7,000 that he wishes to invest in bonds. He can purchase Treasury bonds with a coupon rate of 5.1% or municipal bonds with
Paul has $7,000 that he wishes to invest in bonds. He can purchase Treasury bonds with a coupon rate of 5.1% or municipal bonds with a coupon rate of 3.1%. 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 earnings after taxes are considered? Paul's income from the Treasury bonds after taxes is $ nothing. (Round to the nearest dollar.)
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