Wednesday, 2 October 2019

Theresa Davis is in the 30% personal tax bracket. She is planning to buy $5,000 of HCA (taxable) bonds

Theresa Davis is in the 30% personal tax bracket. She is planning to buy $5,000 of HCA (taxable) bonds that offer a 11% interest rate.
Please answer the following questions:
1) How much interest will Ms. Davis earn from the HCA bonds?
2) Mercy Hospital (a not-for-profit corporation) issues tax exempt bonds at an interest rate of 8%. If Ms. Davis buys $5,000 of these bonds, how much interest will she earn?

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