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QUESTION
If the tax rate is 40 percent, compute the before-tax real interest rate and the after-tax interest rate in each of the following cases.
If the tax rate is 40 percent, compute the before-tax real interest rate and the after-tax interest rate in each of the following cases.
a. the nominal interest rate is 10 percent and inflation rate is 5 percent.
b. the nominal interest rate is 6 percent and the inflation rate is 2 percent.
c. the nominal interest rate is 4 percent and the inflation rate is 1 percent.
