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Problem

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question

Mr. Balfour has $1,000 which he wishes to invest. He is having trouble choosing between tax-free municipal bonds which pay 6% interest and a savings account which pays 8% interest. If Mr. Balfour has a marginal tax rate of 30%, where should he invest his money?

category

economics

options

  1. Municipal bonds
  2. Stock market investments with an average return of 6%
  3. A high-yield checking account with a 7% interest rate
  4. Neither municipal bonds nor savings account
  5. Both municipal bonds and savings account
  6. Real estate investment trusts (REITs) with an average yield of 7%
  7. Corporate bonds with a 5% interest rate
  8. A certificate of deposit (CD) with a 4% interest rate
  9. Savings account
  10. An index fund tracking the S&P 500 with an average return of 8%

src

stemez-Economics

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