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25-11-2020
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If you earned a 2.6% return on your savings with a 25% tax rate, what is your after-tax rate of return?

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Parrain Parrain

26-11-2020

Answer: 1.95%

Explanation:

Your after-tax return can be calculated by the formula;

= return * ( 1 - tax rate)

= 2.6% * ( 1 - 25%)

= 1.95%

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