Question
You are investing $1,000 for one year. You are subject to 40% personal taxes. The real interest rate is 5%. What before-tax nominal rates do
You are investing $1,000 for one year. You are subject to 40% personal taxes. The real interest rate is 5%. What before-tax nominal rates do you need in order to be indifferent between no inflation and 10% inflation?
A.3%
B.22.17%
C.0.64%
D.5%
E.15.5%
The answer is B 22.17%. How do you solve this?
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Entrepreneurial Finance
Authors: Philip J. Adelman; Alan M. Marks
6th edition
9780133099096, 133140512, 133099091, 978-0133140514
