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In: Economics

You want to evaluate your savings of 1.000.000 TL. If you deposit your money in the...

You want to evaluate your savings of 1.000.000 TL. If you deposit your money in the bank, you get 10% interest income in every two years. The Bank also provides 7% annual income to the 4-year private account and 9% annual income to the 6-year private account. Also, if you invest your money in a 6-year government bond, 7.5% per year; if you invest in a 8-year municipal bond, you can get 9.5% interest income per year. However, the government deducts 15% tax in every two years from the interest income you get from the bank and 12% tax in every year from municipal bond. How should you invest 1.000.000 TL to maximize the earnings at the end of 10 years.

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