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Joes savings earn an annual effective rate of i=0.1 on which 45% tax is paid. If the inflation rate is 13% per year, what is

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Answer #1

After tax nominal return = 0.1 * (1 - 0.45) = 0.055

After tax real rate of return = 1.055/1.13 - 1

After tax real rate of return = -0.066371681

After tax real rate of return = -6.64%

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