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Bailey has $8,000 to invest. She has a 24% marginal tax rate and is planning to reinvest her dividends and leave the investment in place for three years. If she can invest the money in taxable securities that earn qualified dividends with a 6% rate of return before tax, how much will she have at the end of the third year?

Respuesta :

TomShelby

Answer:

Amount 9,145.06

Explanation:

after-tax interest rate:

r (1 - t ) = after-tax rate

0.06 (1 - 0.24) = 0,0456

Now, we solve for the future value of the invesmtent after taxes:

[tex]Principal \: (1+ r)^{time} = Amount[/tex]

Principal 8,000.00

time 3.00

rate 0.04560

[tex]8000 \: (1+ 0.0456)^{3} = Amount[/tex]

Amount 9,145.06

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