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Maria, who is single, is trying to decide whether to invest in a $10,000 City of San Diego School District bond that will pay 5 percent interest each year or a S10,000 General Atomic, Inc. bond that will pay 6 percent interest each year. Maria's other taxable income (after all deductions, exemptions, etc.) is $100,000 in the year 2018. What would you advise Maria to do? a. Invest in the General Atomic bond because 6 percent interest is better than 5 percent. b. Invest in the School District bond because on an after tax basis she would be $44 better off each year (based on 2018 tax rates). C. Invest in the General Atomic bond because the tax would be less than the additional one percent interest that would be earned. d. Invest in the School District bond because on an after tax basis she would be $144 better off each year (based on 2018 tax rates). e. Invest in the School District bond because it is always better to avoid income tax at any cost.
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