Results 1 to 2 of 2

Math Help - Actual After-Tax Rate of Return.

  1. #1
    Newbie
    Joined
    Jun 2009
    Posts
    3

    Question Actual After-Tax Rate of Return.

    Greetings,

    I'm trying to solve a 3 part problem which has the following questions:

    a) Determine the rate of return before taxes.
    After Solving: Answer: 21 %

    b) If the effective income tax rate is 42 percent, what is the approximate after-tax rate of return?
    After Solving: Answer: 8 %

    c) What is the actual after-tax rate of return?
    I don't really understand this question, I can't tell the difference between (approximate after-tax rate of return) and (actual after-tax rate of return)

    Does anyone Know the difference?


    thanks.
    Last edited by 0xCMD; July 9th 2009 at 12:01 PM.
    Follow Math Help Forum on Facebook and Google+

  2. #2
    MHF Contributor
    Joined
    Aug 2007
    From
    USA
    Posts
    3,110
    Thanks
    2
    Start with 100.

    21% Return gives 121 after one year.

    Increase is 21%

    42% of 21% is 8.8% paid in taxes.

    Are you SURE you don't want to rethink your answer to Part B?
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Rate of return of an annuity
    Posted in the Business Math Forum
    Replies: 1
    Last Post: March 24th 2010, 12:50 AM
  2. Find Rate of Return
    Posted in the Business Math Forum
    Replies: 3
    Last Post: June 29th 2009, 06:09 AM
  3. What is the Required Rate of Return
    Posted in the Business Math Forum
    Replies: 0
    Last Post: March 21st 2007, 02:46 PM
  4. Real rate of return
    Posted in the Business Math Forum
    Replies: 0
    Last Post: February 18th 2007, 07:20 AM
  5. Rate of Return
    Posted in the Business Math Forum
    Replies: 2
    Last Post: February 17th 2007, 11:26 AM

Search Tags


/mathhelpforum @mathhelpforum