Suppose One Year Ago That the Price Index Was 120

question 145

Multiple Choice

Suppose one year ago that the price index was 120 and Mark purchased $20,000 worth of bonds.One year later the price index is 126.Mark redeems his bonds for $22,250 and is in a 40% tax bracket.What is Mark's real after-tax rate of interest to the nearest tenth of a percent?

• A)4.3%
• B)3.1%
• C)1.8%
• D)1.2%

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Definitions:

#6 Dash

A designation used in the hydraulic industry to specify hose or fitting size, equivalent to a 3/8-inch size.

Hydraulic Fittings

Components used to connect tubes, pipes, and hoses in hydraulic systems, securing high-pressure fluid flow.

Pipe Seal Compound

A chemical substance used to create a leak-proof and pressure-tight seal on pipe threads or joints.

Torquing

The act of applying a specific amount of twisting force to a nut, bolt, or screw to ensure it is tightened to the correct specification.