Barbara’s combined federal and provincial marginal tax rate is 24.5%. If she invests $2,000 every year for 5 years, how
Posted: Sun Jun 05, 2022 7:07 am
Barbara’s combined federal and provincial marginal tax rate is
24.5%. If she invests $2,000 every year for 5 years, how much
after-tax income will she earn on her investment if interest is
paid at a rate of 3.5%, compounded quarterly? Barbara pays
quarterly tax instalments due to her high investment income.
Hint: Transform the interest rate to an after-tax rate by
multiplying by (1 – tax rate).
24.5%. If she invests $2,000 every year for 5 years, how much
after-tax income will she earn on her investment if interest is
paid at a rate of 3.5%, compounded quarterly? Barbara pays
quarterly tax instalments due to her high investment income.
Hint: Transform the interest rate to an after-tax rate by
multiplying by (1 – tax rate).