ropbox Quizzes Checklist Grades More Tools Resources Left033

ropbox Quizzes Checklist Grades More Tools Resources Left:0:33:12 Joshua Hinton: Attempt 1 Nicholas earned 14.5% in his savings account. If he is in the 29% tax bracket, what is his after- tax savings rate of return? a) 3.625% b) 5.220% c) 10.295% d) 14.500% Question 56 (4 points)

Solution

Earnings on Nicholas Savings = 14.5%

Applicable Tax Rate on Earnings = 29%

After Tax savings rate of Return = Earnings rate – Tax on Earnings

= 14.5% - [14.5% x 29%]

= 14.5% - 4.205%

= 10.295%

Hence, The Answer is “C. 10.295%”