Based on the inflation rate and the yield to maturity, the real rate of return on the bonds will be 5.23%.
<h3>What is the real rate of return?</h3>
This can be found by the formula:
= (( 1 + nominal Return) / ( 1 + Inflation rate)) - 1
Solving gives:
= ( ( 1 + 8.0%) / ( 1 + 8.90%)) - 1
= 1.0523 - 1
= 5.23%
Find out more on real rates of return at brainly.com/question/1698368.
Answer:There u go
Explanation:
Perhaps you have heard of the miracle of compounding. Innumerable investors have used it to their advantage to make their money grow faster than would be the case with simple interest. The great thing about compounding is that it doesn't require additional work on your part: you just sit back and watch your money grow. How's that for an investment strategy?
There are two basic types of interest: simple and compound. Simple interest is the amount of interest earned on the original amount of money invested. Simple interest is paid out as it is earned and does not become part of an account's interest-bearing balance. The invested amount is called principal. Let's say you invest $100 (the principal) at a yearly interest rate of 5 percent. Multiplying the principal by the interest rate gives you an interest payment of $5. This is your simple interest. The next year and each year thereafter, you will be paid $5 of interest on the principal of $100.
Compound interest is interest paid on interest. At 5 percent interest compounded annually, you will have $105 after the first year. If you keep this investment for another year, you will be paid interest on your original $100 and on the $5 you made in interest the first year. The longer you invest your money, the higher your interest payments will grow, not only on your original amount but on the additional interest you earn each year. This is what makes compounding interest so powerful.
When credit unions speak of compounding, they refer to dividends rather than interest.
The longer an investment is allowed to compound interest, the faster your balance will grow and the higher your returns will be. In the case of compounding interest, time really is money. Let's say you invest $1,000 for five years, with an annual interest rate of 5 percent. The difference in your investment earnings from simple and compounded interest will look like this:
Comparison of Simple and Compound Interest
Answer:
message flows are modeled with solid arrows
Explanation:
In Business Process Model and Notation (BPMN), message flows are used in the collaboration diagram to show how two or more distinct processes within the model, communicate and collaborate with each other without any form of central control.
Dash lines together with an empty circle are used for the message flow to show where the message comes from and an empty arrow head is used to show where the message would be terminating in the model.
Answer:
I don't know what is meaning
Explanation:
sry
Answer:
The answer is $48.
Explanation:
20% of $200 is 40. So the total amount they will pay is $240. Since there will be five payments you divide this by five. That makes %48.
