Taxable bond is expected to pay annual interest

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Reference no: EM131056212

A taxable bond is expected to pay annual interest of 5.6%, and a tax-exempt municipal bond is expected to pay annual interest of 2.2%. If your marginal tax rate is 28.0%, and you invest $4,000, how much will you earn (after-tax) if you purchase the taxable bond?

A) $224.00 less than if you purchase the tax-exempt bond

B) $73.28 less than if you purchase the tax-exempt bond

C) $224.00 more than if you purchase the tax-exempt bond

D) $73.28 more than if you purchase the tax-exempt bond

Reference no: EM131056212

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