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If the Inflation Rate Was 8%, and the Tax Rate

question 200

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If the inflation rate was 8%, and the tax rate was 20%, and you deposited money in a bank account that pays 12%, what is your after tax real interest rate? Show you work.


Definitions:

Contract Frustration

A legal concept whereby a contract is terminated because an unforeseen event has rendered contractual obligations impossible to perform.

Express Repudiation

The act of clearly and explicitly refusing to perform an obligation or duty outlined in a contract.

Obligations Refusal

A situation where an individual or entity declines to fulfill a duty or agreement previously committed to.

Liquidated Damages

A set sum of money required as a penalty for not fulfilling contractual obligations.

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