Homework: 3-3 MyFinanceLab: Assignment: Module Three Home Save Score: 0.4 of 1 p

Question

Homework: 3-3 MyFinanceLab: Assignment: Module Three Home Save Score: 0.4 of 1 pt 3 of 6 (5 complete) HW Score: 54.88%, 3.29 of 6 pts & Problem P5-8 (similar to) Question Help Assuming a 1-year, money market account investment at 4.17 percent AP a 2.2% inflation rate, a 35 percent marginal tax bracket and a constant $50,000 balance, calculate the after-tax rate of return, the real return and the total monetary return. What are the implications of this result for cash management decisions? Assuming a 1-year, money market account investment at 4.17 percent (APY), a 35 percent marginal tax bracket, and a constant $50,000 balance the after-tax rate of return is 2.71 %. (Round to two decimal places.) Assuming a 1-year, money market account investment at 4.17 percent (APY), a 35 percent marginal tax bracket, and a constant $50,000 balance the after-tax monetary return is S 1355. (Round to the nearest dollar.) Given an after-tax return of 2.71% and an inflation rate of 2.2% the after-tax real return is .5 %. (Round to two decimal places.) Given an after-tax return of 2.71% and an inflation rate of 2.2% the after-tax real monetary return is S Round the nearest dolla

Explanation / Answer

After tax monetary return = $1355

Inflation rate = 2.2%

After tax real monetary return

= After tax monetary return / (1+Inflation rate)

= $1355 / (1+0.022)

= 1355 / 1.022

= $1325.83

After tax real monetary return = $1326

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