Miles Invests $20,000 in a Taxable Bond for 5 Years

question 38

Multiple Choice

Miles invests $20,000 in a taxable bond for 5 years that earns 5% interest per year.His marginal tax rate is 15%.What is his after-tax accumulated investment at the end of year 1?

• A)$20,850
• B)$21,000
• C)$21,700
• D)$22,000

---

Definitions:

Wholesale Price

The price charged for goods or services when sold in large quantities, usually to retailers who then sell them to the public.

Retail Price

The total cost at which an item is sold to the consumer, which includes the cost of production, distribution, and a markup for profit.

Operating Expenses

Costs associated with operating a business, excluding the cost of goods sold.

Mid-Summer Sale

A Mid-Summer Sale is a promotional event held by retailers offering significant discounts during the middle of the summer season.