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Save & Exit Sul If Tom invests $80,000 in a taxable corporate bond that provides a 7 percent before tax return, how much will
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Answer #1
Aftertax rate of return = 7%*(1-0.35)
=4.55%
Investment worth in 8 year
FV= PV*(1+r)^n
Where,
FV= Future Value
PV = Present Value
r = Interest rate
n= periods in number
= $80000*( 1+0.0455)^8
=80000*1.42755
= $114204
Investment worth in 20 year
FV= PV*(1+r)^n
Where,
FV= Future Value
PV = Present Value
r = Interest rate
n= periods in number
= $80000*( 1+0.0455)^20
=80000*2.4349
= $194792
Correct Option : LAST
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