2 ms·
Interesting, I used different numbers (10 years and 33% tax) in my comment but got the same result of 0.4% real returns. Check my math
by NavinF 3y ago
Interesting, I used different numbers (10 years and 33% tax) in my comment but got the same result of 0.4% real returns. Check my math
- mlyle 3y ago(10000 * (1.05^10) - 10000) * .67 = 4213. 14213/(1.032^10) = 10372; or about a .36% return. Not surprising that a lower tax rate gets to the same number sooner through compounding. BUt the bigger issue is that you have to pay tax on interest as it is accrued, not all at the end. So in your case there's a 3.35% return vs. 3.2% inflation or a .15% net return.
- NavinF 3y agoThanks, makes sense