Business, 19.08.2020 02:01 chargedn2916

Suppose the tax rate on nominal interest income is 20% and does not change over time. Also assume the real interest rate remains constant. In year 1, the inflation rate is 4% and the nominal interest rate is 10%. In year 2, the inflation rate is 14% The real interest rate in both years is 16 The nominal interest rate in year 2 is 20 The after-tax nominal interest rate in year 1 is 7. a. The after-tax nominal interest rate in year 2 is
b. The after-tax real interest rate in year 1 is
c. The after-tax real interest rate in year 2 is

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Suppose the tax rate on nominal interest income is 20% and does not change over time. Also assume th...