Curtis Invests $250,000 in a City of Athens Bond That

Multiple Choice

Curtis invests $250,000 in a city of Athens bond that pays 7 percent interest.Alternatively, Curtis could have invested the $250,000 in a bond recently issued by Initech, Inc.that pays 9 percent interest with similar risk as the city of Athens bond.Assume that Curtis's marginal tax rate is 24 percent. How much explicit tax would Curtis incur on interest earned on the Initech, Inc.bond?

A) $17,500
B) $5,400
C) $4,200
D) $12,600
E) None of the choices are correct.