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Part 1
Suppose that the tax on interest income is levied on the nominal interest rate, the tax rate is 20 percent, and the real interest rate is 3 percent a year. There is no inflation.
Calculate the after-tax real interest rate and the true tax rate on interest income.
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Part 1
The after-tax real interest rate is
enter your response here percent.
>>> Answer to 1 decimal place.
Part 2
The true tax rate on interest income is
enter your response here percent.