savings account
Question
Matt recently deposited $31,250 in a savings account paying a guaranteed interest rate of 5.5 percent for
the next 10 years.(Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
| a. | If Matt expects his marginal tax rate to be 20 percent for the next 10 years, how much interest will he earn after-tax for the first year of his investment? |
| b. | How much interest will he earn after-tax for the second year of his investment if he withdraws enough cash every year to pay the tax on the interest he earns? |
| c. | How much will he have in the account after four years? |
| d. | How much will he have in the account after seven years? |
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