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    smeredith's Avatar
    smeredith Posts: 5, Reputation: 1
    New Member
    		  
    #1

    Aug 2, 2009, 01:24 AM
    Calculating Investments
    How do I calculate the after-tax yields on foregoing investments, if I have a 28% marginal tax rate ?
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Aug 2, 2009, 05:28 AM
    Generally, the after-tax yield is P x (1 - T), where P is the pre-tax yield, and T is your marginal tax rate.

    That little formula ought to get the job done for you.

    Note that the formula works just as well for non-taxed instruments, such as munis, as long as you remember that in such case, T = 0. Then the formula reduces to

    After-tax yield = P x (1 - 0) = P.
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