You put money into an account that earns a 5 percent nominal interest rate.The inflation rate is 2 percent,and your marginal tax rate is 20 percent.What is your after-tax real rate of interest?
A)3.6 percent.
B)2.4 percent.
C)2.0 percent.
D)4.4 percent.

Question

Quizplus · Accepted Answer

The Answer of You put money into an account that earns a 5 percent nominal interest rate.The inflation rate is 2 percent,and your marginal tax rate is 20 percent.What is your after-tax real rate of interest?
A)3.6 percent.
B)2.4 percent.
C)2.0 percent.
D)4.4 percent.

You Put Money into an Account That Earns a 5