Final answer:
The after-tax rates of return for investments in interest or dividend paying securities may or may not increase with the length of the investment, depending on various factors such as tax rate and growth rate.
Step-by-step explanation:
The after-tax rates of return for investments in either interest or dividend paying securities may or may not increase with the length of the investment. It depends on several factors including the tax rate, the growth rate of the investment, and the reinvestment of dividends. Generally, if the tax rate is higher and the growth rate of the investment is lower, the after-tax rate of return may be lower over a longer period.
For example, if an investment in a dividend-paying security generates a higher return than the tax rate, the after-tax rate of return may increase with the length of the investment. On the other hand, if the tax rate is higher than the growth rate of the investment, the after-tax rate of return may decrease over a longer period.
It is important to note that tax laws and rates may vary between jurisdictions, so it is advisable to consult with a tax professional for specific advice regarding after-tax rates of return.