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

question 200

Essay

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.

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Definitions:

Availability Heuristic

A cognitive shortcut based on easily recalled examples when judging a specific area, notion, practice, or decision-making process.

Base-Rate Information

This term relates to how often an event occurs within a general population.

Representativeness Heuristic

A mental shortcut that involves making judgments about the probability of an event under uncertainty, based on how much it resembles existing prototypes.

Algorithm

A set of rules or procedures for solving a problem in a finite number of steps, often used in computer programming.