Parker has $10,000 to invest.He wants to put his money in a one-year investment earning an annual interest rate of 12%.Parker is in a 42% tax bracket.
Required:
a) Calculate the total value of Parker's investment, after-tax, at the end of the year.
b) Calculate the amount of tax Parker will pay on his investment.

Question

Quizplus · Accepted Answer

The Answer is a) $10,000 + (($10,000 * 12) *(1 -.42)) = $10,696
b) $10,000 *.12*.42 = $504

Parker Has $10,000 to Invest