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* f Page 16, Terrace Bay-Schreiber News, Wednesday, April 13, 1983 Increasing your after tax investment return by A.O. MILLER McLeod Young Weir Earning dividend in- come versus interest in- come has received a lot of press recently -- the reason: when you take the dividend tax credit bond you would receive 7'" per cent interest on the $1,000.00 face value of the bond for 669 days' (June 1st 1982 to April 1st 1984) for $137.46 interest. Assuming a 50 per cent tax bracket you would retain $68.73 (137.46 x 50 per cent) of the interest. You would also receive a $100.00 capital gain of which only one half is taxed at your normal rate so $100 x 1/2 x 50 per cent tax bracket = $25.00 tax payable for $75.00 re- tained -- added to the $68.73 (interest re- tained) for total after tax. retention of $143.73 (68.73 plus 75.00) on a $900.00 investment. Now compare this to investing the same $900.00 in a Guaranteed Investment Certificate or a Term Deposit where you receive 15 per cent interest for the same 669 days. Total interest would amount to $247.44 and in the same 50 per cent tax bracket you would _ retain $123.72. Conclusion: two com- parable investments give you different tax re- turns. In this example the dollar difference is $20.01 for a 16.17 per cent improvement in your after tax return. Can you afford not to consider it as an alter- native? into consideration your 'after tax return' on dividend income is 1.5 times higher than on an equivalent interest rate. "g Capital Gains also re- ceive preferential tax treatment in that one- half of all capital gains e to the client tax free -- the other half is taxed at your normal rate. How do you take ad- vantage of this? One way, is to invest in dis- counted bonds: bonds which can be purchased for less than their maturity or par value. The reason they can be purchased for less than their maturity value is their interest return -- it is less than is currently acceptable. Who would pay $100.00 for a bond that pays 72 per cent interest when you can invest in a Guaranteed Investment Certificate or a Term Deposit at 14 per cent plus. To gener- ate the same rate of return the 7% per cent coupon bond has to sell for less than $100.00. The difference between the purchase price and the maturity value is treated as a capital gain while the 7% per cent interest is treated as interest income. Let's look at an exam- 'ple. -You can buy a Government of Canada Bond (not to be confu- sed with a Canada Sav- ings Bond) with a 7% 'per cent coupon matur- ing on April 1, 1984 for $90.00. So for $1000.00 ef ps LtheQSay cPRNIVAL Op VALUES It's a real circus of fantastic values waiting for you at the Bay! Hurry in...3 days only! Prices effective Thursday, Friday & Saturday April 14-15-16 Limited Quantities - Personal Shopping Only No Phone Orders - We reserve the right to limit quantities Look for our Big Flier this Week!! ; { } / Many Many unadvertised specials throughout the Store ; ; ; a, THURSDAY A.M. SPECIALS BATHROOM TISSUE Facelle 8 roll pack 3.09 per pack 8 TRACK TAPES Recorded - assorted Artists 3/1.00 SHAMPOO Justin Time Local CIGARETTES Players Light, Belvedere, For Summer Head & Shoulders 450 ml. k t DuMaurier, Export A limited quantity Ss c | ers Limit 2 Cartons per customer 3 Be 10.99... Tate 2 pecus" compete a5 7 carton Propane Barbecue continued from page 1 $ 1 So 95 SPORT YARN Value fe 100% Acrylic 300 g. ball assorted colours es and team leaders, were welcomed by David Dore, President of the C.S.F.A. The recept- ion provided an oppor- tunity for all the skaters to meet each other and join in the fun with the Easter Bunny himself, who led, as you would expect, the "bunny hop." A good time was had by all and fond memories of this occa- sion will remain with our skaters for years to come. This was the first major competition for the Super Superiors and in spite of their inex- perience and small sized "team, they managed to attract the attention of many of the spectators and some of the judges WESTCLOCK ALARMS While they last only 6.99 limited quantities Regular 7.49 4.99... With any purchase Draw to be made Saturday 5:00 p.m. FRIDAY A.M. SPECIALS JEWELLERY PAMPERS IVORY SOAP SOCKS . ots Assorted colour tones Toddler 48's 4 personal size bars per pkg. Men's Assorted colors irregulars with several distinct- limited quantity limited quantities limited quantity ive moves in their pro- 1 49 ee 09 8.88 99 : The Super Superiors a a pkg. a pkg. Regular are priced at 3.98 pr. Bw Doct Doe Die Dae 5 thank all the people of Terrace Bay, Horne- payne, Manitouwadge, Marathon, Schreiber and all of the North Shore for their excellent support. We didn't win, but we were there, thanks to you; we gave it our best shot and we came close. 4 "Vay For guaranteed satisfaction... HS = its hard not to think of the Bay! Rng | Hudsons Bay Company SCHREIBER ade 'se ine i