Investor to be indifferent between corporates and muni

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Reference no: EM131997704

1. You run a little short on your spring break vocation, so you put $1,500 on your credit card. You can only afford to make the minimum payment of $40 per month. The interest rate on the credit card is 2 percent per month. How many years will you need to pay off the $1500 debt?

2. An investor is in the 30% tax bracket. If corporate bonds offer 9% yields, what must muni’s pay for the investor to be indifferent between corporates and muni’s?

Reference no: EM131997704

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