Question

When comparing two investment options, one with an expected return of 10% per year and another with an expected return of 6% per year, which option would be more profitable considering the capital gains tax rate is 20%?

227

likes

1133 views

Answer to a math question When comparing two investment options, one with an expected return of 10% per year and another with an expected return of 6% per year, which option would be more profitable considering the capital gains tax rate is 20%?

$Expert avatar$

Timmothy

4.8

99 Answers

1. Calculate the after-tax return for the investment with a 10% expected return:

R_{10\%} = 10\% \times (1 - 0.20) = 10\% \times 0.80 = 8\%

2. Calculate the after-tax return for the investment with a 6% expected return:

R_{6\%} = 6\% \times (1 - 0.20) = 6\% \times 0.80 = 4.8\%

3. Compare the after-tax returns:

8\% > 4.8\%

Thus, the investment option with a 10% expected return is more profitable after considering the capital gains tax rate of 20%.

Frequently asked questions (FAQs)

How many millimeters are in 5 meters?

Question: What is the volume of a sphere with radius r and the surface area of a sphere with radius r in terms of the formulas V = (4/3)πr³ and A = 4πr²?

Math question: Is there a solution for the equation x^n + y^n = z^n where n > 2, x, y, z are non-zero integers?

New questions in Mathematics

To calculate the probability that a player will receive the special card at least 2 times in 8 games, you can use the binomial distribution. The probability of receiving the special card in a single game is 1/4 (or 25%), and the probability of not receiving it is 3/4 (or 75%).

A college believes that 22% of applicants to that school have parents who have remarried. How large a sample is needed to estimate the true proportion of students who have parents who have remarried to within 5 percentage points?

Solve the math problem 400 students are asked if they live in an apartment and have a pet: Apartment: 120 Both: 30 Pet: 90 The probability that a randomly selected student not living in an apartment has a pet is

The bus one way of the road which is 10km is heading with speed of 20km/h ,then the bus the other 10km is heading with speed of 60km/h. The middle speed of the road is it equal with arithmetic speed of the v1 and v2 ?

Which of the following is the product of multiplying twenty-seven and twenty-five hundredths by nine and twenty-seven hundredths?

To make brine, José buys 1 kg of salt and pays 12 pesos. If he buys 4 kg, they charge him 48 pesos, but for 100 pesos they sell him 9 kg. What is the constant of proportionality?

2.3/-71.32

A regional candy factory sells a guava roll at a price of $48, the monthly fixed costs amount to $125,000 and the variable cost for making a guava roll is $28. Determine: a) The equation of the total income from the production of guava rolls.

What is 28 marks out of 56 as a percentage

Task 1 angel has 3 quarters 3/8 of a tank of gasoline and Miguel 7/8, who has more gasoline? number line on number line

Given (3x+2)E [2;14] how much money (in soles) does Sophia have if numerically it is the greatest value of x?

Solve the equation: sin(2x) = 0.35 Where 0° ≤ x ≤ 360°. Give your answers to 1 d.p.

I. Order to add 40.25+1.31+.45 what is the first action to do ?

30y - y . y = 144

When Sara was 15 years old, an uncle left her as inheritanceà a sum of 10,000 euros which he invested in a bank that applies the interest rate of 2,5% annual. Today Sara is 18 years and wants to buy a'car, how much she can ò withdraw from the bank?

A buyer purchased a North Carolina home for $475,250. The seller allowed the buyer to assume his first small mortgage with a loan balance of $110,000. How much is the excise tax paid in the transaction? $951 $729.50 $950.50 $221 none of the above

In poker, a full house consists of five cards, where two of the cards have the same number (or letter) and the remaining three also have the same number (or letter) as each other (but not as the previous two cards). Use a search engine or Wikipedia to understand the concept better if necessary. In how many different ways can one obtain a full house?

When taking a test with m closed answers, a student knows the correct answer with probability p, otherwise he chooses one of the possible answers at random. What is the probability that the student knows the correct answer given that he answered the question correctly.

Consider the function f(x)=1/2(x+1)^2-3. Use the preceding/following interval method to estimate the instantaneous rate of change at 𝑥 = 1.

Select a variable and collect at least 50 data values. For example, you may ask the students in the college how many hours they study per week or how old they are, etc. a. Explain what your target population was. b. State how the sample was selected. c. Summarise the data by using a frequency table. d. Calculate all the descriptive measures for the data and describe the data set using the measures. e. Present the data in an appropriate way. f. Write a paragraph summarizing the data.

When comparing two investment options, one with an expected return of 10% per year and another with an expected return of 6% per year, which option would be more profitable considering the capital gains tax rate is 20%?

Answer to a math question When comparing two investment options, one with an expected return of 10% per year and another with an expected return of 6% per year, which option would be more profitable considering the capital gains tax rate is 20%?

You might be interested in