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Will is currently in a 22% tax bracket and has a 7.2% savings rate of return. What is his after-tax savings rate of return

Sagot :

Based on the information given his after-tax savings rate of return is 5.62%.

After-tax saving rate of return

Using this formula
After-tax savings rate=Saving rate of return×(1-Tax rate)

Where:

Saving rate of return=7.2%

Tax rate=22%

Let plug in the formula

After-tax savings rate=0.072×0.78

After-tax savings rate=0.05616×100

After-tax savings rate=5.62% (Approximately)

Inconclusion his after-tax savings rate of return is 5.62%.

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