Tax Equivalent Yield Solution

STEP 0: Pre-Calculation Summary
Formula Used
Tax Equivalent Yield = Tax Free Yield/(1-Tax Rate)
Rte = Rtf/(1-tax)
This formula uses 3 Variables
Variables Used
Tax Equivalent Yield - Tax Equivalent Yield is the pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax-free municipal bond.
Tax Free Yield - Tax Free Yield is the income return on an investment, such as the interest or dividends received from holding particular security without any tax imposed.
Tax Rate - The Tax Rate is the ratio (usually expressed as a percentage) at which a business or person is taxed.
STEP 1: Convert Input(s) to Base Unit
Tax Free Yield: 2.5 --> No Conversion Required
Tax Rate: 8 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
Rte = Rtf/(1-tax) --> 2.5/(1-8)
Evaluating ... ...
Rte = -0.357142857142857
STEP 3: Convert Result to Output's Unit
-0.357142857142857 --> No Conversion Required
FINAL ANSWER
-0.357142857142857 -0.357143 <-- Tax Equivalent Yield
(Calculation completed in 00.004 seconds)
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4 Tax Calculators

Sales Tax Amount
Go Sales Tax Amount = Price*(Sales Tax Percentage/100)
Tax Equivalent Yield
Go Tax Equivalent Yield = Tax Free Yield/(1-Tax Rate)
Effective Tax Rate
Go Effective Tax Rate = Tax Expense/Pre Tax Income
Total Sales Tax
Go Total Sales Tax = Price+Sales Tax Amount

Tax Equivalent Yield Formula

Tax Equivalent Yield = Tax Free Yield/(1-Tax Rate)
Rte = Rtf/(1-tax)

How to Calculate Tax Equivalent Yield?

Tax Equivalent Yield calculator uses Tax Equivalent Yield = Tax Free Yield/(1-Tax Rate) to calculate the Tax Equivalent Yield, Tax Equivalent Yield is the pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax-free municipal bond. Tax Equivalent Yield is denoted by Rte symbol.

How to calculate Tax Equivalent Yield using this online calculator? To use this online calculator for Tax Equivalent Yield, enter Tax Free Yield (Rtf) & Tax Rate (tax) and hit the calculate button. Here is how the Tax Equivalent Yield calculation can be explained with given input values -> -0.357143 = 2.5/(1-8).

FAQ

What is Tax Equivalent Yield?
Tax Equivalent Yield is the pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax-free municipal bond and is represented as Rte = Rtf/(1-tax) or Tax Equivalent Yield = Tax Free Yield/(1-Tax Rate). Tax Free Yield is the income return on an investment, such as the interest or dividends received from holding particular security without any tax imposed & The Tax Rate is the ratio (usually expressed as a percentage) at which a business or person is taxed.
How to calculate Tax Equivalent Yield?
Tax Equivalent Yield is the pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax-free municipal bond is calculated using Tax Equivalent Yield = Tax Free Yield/(1-Tax Rate). To calculate Tax Equivalent Yield, you need Tax Free Yield (Rtf) & Tax Rate (tax). With our tool, you need to enter the respective value for Tax Free Yield & Tax Rate and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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