How we can calculate the marginal tax rate


Dennis is currently considering investing in municpal bonds that earn 8.80 percent interest, or in a taxable bonds issued by the Coca Cola Company that pay 9 percent.

A. If Dennis's tax rate is 18%, which bond should he choose? Municipal bond

B. Which bond should he choose if his tax rate is 30%? Municipal bond

C. At what tax rate would he be indifferent between the bonds? I can't seem to understand how to get the Marginal tax rate. Please help.

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Accounting Basics: How we can calculate the marginal tax rate
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