You Put Money in an Account and Earn a Real

question 71

Multiple Choice

You put money in an account and earn a real interest rate of 8 percent. Inflation is 3 percent, and your marginal tax rate is 20 percent. Which of the following is your after-tax real rate of interest?

• A)1.8 percent
• B)2.8 percent
• C)3.8 percent
• D)5.8 percent

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Definitions:

Mental Age

A concept used to describe the level of intellectual development as measured by standardized tests compared to an individual's chronological age.

IQ

stands for Intelligence Quotient, a measure of a person's intellectual abilities relative to others, based on performance on standardized tests.

Consistent

Showing steady and uniform characteristics or behavior over a period of time, lacking any significant variation.

Reliable

The extent to which an assessment tool produces consistent and stable results over multiple applications or time periods.