Find toms before-tax rate of return and ignoring inflation, Microeconomics

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Find toms before-tax rate of return and ignoring inflation

Problem

Tom Ward put $10,000 in a 5-year certificate of deposit that pays 12% interest per year. At maturity he will receive his $10,000 back. Tom's marginal income tax rate is 42%. If the inflation rate is 7% per year, find his

(a) Before-tax rate of return, ignoring inflation

(b) After-tax rate of return, ignoring inflation

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: Find toms before-tax rate of return and ignoring inflation

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Microeconomics: Find toms before-tax rate of return and ignoring inflation

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