If the inflation rate is 6% and tax rate is 30%. The required rate of return to maintain the value of an investment is
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To calculate the real rate of return after tax, divide 1 plus the after-tax return by 1 plus the inflation rate. Dividing by inflation reflects the fact a dollar in hand today is worth more than a dollar in hand tomorrow. In other words, future dollars have less purchasing power than today's dollars.
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