What is the annual after-tax real rate of return

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a. A deposit of $1000 earns a continuous force of interest given by 0.06t for the first three years (t is time in years), and a constant force of 0.04 thereafter. What nominal quarterly compounding rate is earned over the first 4 years?

b. A person's savings earns an effective annual rate of return of 9%. Income tax is paid on the interest earned at a rate of 40%. If the inflation rate is 7% per year, what is the annual after-tax real rate of return?

Reference no: EM131828199

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