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Business, 20.06.2020 21:57 divyaravinder8148

g was considering purchasing an interest in a tax-exempt bond fund for $ 100,000 when he discovered that the interest must be included on his state income tax return. The interest rate is 5 %. His marginal Federal tax rate is 35%, and his marginal state income tax rate is 10%. Juan itemizes his deductions on his Federal income tax return. As an alternative, Juan can purchase a state bond (a double-exempt bond) yielding 4.9% interest that is exempt from both Federal and state income tax. Which investment would yield the greater after-tax return?

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