If Tom Invests $40,000 in a Taxable Corporate Bond That

Multiple Choice

If Tom invests $40,000 in a taxable corporate bond that provides a 8 percent before-tax return, how much will Tom's investment be worth in either 8 or 20 years from now when the bond matures? Assume Tom's marginal tax rate is 35 percent.

A) $74,037; $186,438
B) $75,292; $174,913
C) $62,131; $118,215
D) $60,005; $110,249
E) None of the choices are correct.