Nicholas earned 10% in his savings account. If he is in the 28% tax bracket, what is his after-tax savings rate of return? Multiple Choice 28% 10% 7.2% 3.6% 2.5%
Added by James C.
Step 1
Since he earned 10% on his savings and is in the 28% tax bracket, we calculate the tax on the earnings. Tax on earnings = Earnings × Tax rate Tax on earnings = 10% × 28% = 0.10 × 0.28 = 0.028 or 2.8% Show more…
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