Question

If you earned a 2.6% return on your savings with a 25% tax rate, what is your after-tax rate of return?

Answer 1

Answer: 1.95%

Step-by-step explanation:

Your after-tax return can be calculated by the formula;

= return * ( 1 - tax rate)

= 2.6% * ( 1 - 25%)

= 1.95%