What is the net after-tax return on this bond

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Reference no: EM132050277

1. You want to save for your daughter's college education. You want to save a fixed amount each year for this expense. You expect to earn 6% on this investment. How much do you have to save each month in order to have $250,000 in 18 years?

2. Suppose that you are offered an investment that will pay you $1,000 per year for 10 years. If you can earn a rate of 9% per year on similar investments, how much would you pay for the investment.

3. Suppose a bank has found bank-qualified municipal bonds which have a nominal gross rate of return of 8 percent and that it can borrow funds needed for this purchase at a rate of 6.25 percent. The bank is in the 35 percent tax bracket. What is the net after-tax return on this bond?

Reference no: EM132050277

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