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Your Bank has stated that it pays 3% Interest, annually compounded, for a 7-year certificate of deposit. You have decided to invest $10,000 for 7 years. If the average rate of Inflation during the 7 years is 2.5% per year during the 7 years, & you anticipate being in the 20% tax bracket for the first 3 years, &40% for the next 4 years, what is your Real, After Tax return? Should you make the Deposit?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91617859

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