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garri49 [273]
1 year ago
7

Economic activity in developing countries is limited at least in part due to limited investment. Investment is limited mostly du

e to insufficient lending. Lending is mostly limited due to economic uncertainty and the prospect of unexpected inflation.
In light of this, please describe how a lender can lose during inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan.
How would a variable-interest-rate loan (one that adjusts over the contract period) eliminate these losses?
Business
1 answer:
Tpy6a [65]1 year ago
4 0

Inflation is the economic condition in which the interest rate keeps increasing which is beneficial for the lenders. But not a fixed rate lender.

<h3 /><h3>What is Interest Rate?</h3>

Interest rate is the prevailing market rate which the lender of the money gets in return for the money provided as a loan.

If there is a fixed interest contract the lender will get the same percentage of return for the duration of contract, no matter the fluctuation of the interest rate in the market. This is not beneficial when the economy is facing inflation. As whatever be the rate in the market (definitely higher) the lender will get the same percentage of return.

However if there is a variable rate contract the rate is updated and the lender is paid at the updated interest rate. This is beneficial when the economy is facing inflation.

Learn more about interest rates at brainly.com/question/28142837

#SPJ1

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The Weber Company purchased a mining site for $1,750,000 on July 1. The company expects to mine ore for the next 10 years and an
AlladinOne [14]

Answer:

The correct solution is "$26,000".

Explanation:

The given values are:

Cost

= $1,750,000

Salvage value

= $150,000

First Year Extraction

= 6,500

Total Extraction

= 400,000

Now,

⇒ Depletion \ Expense = (Cost - Salvage \ value)\times (\frac{First \ Year \ Extraction}{Total \ extraction} )

On putting the values, we get

⇒                                = (1,750,000 - 150,000)\times (\frac{6,500}{400,000} )

⇒                                = 1,600,000\times 0.01625

⇒                                = 26,000 ($)  

4 0
3 years ago
Joe sold gold coins for $1000 that he bought a year ago for $1000. He says, "At least I didn't lose any money on my financial in
Sav [38]

Answer:

TRUE

Explanation:

Opportunity cost refers to those costs that can help us save more money. When we move from one investment to another, then the additional income from the other investment is called opportunity cost.

In this case, if Joe chooses Invest in a bank deposit in the place of Gold coins, he can enjoy 3% more return at the place of no profit and loss, so Joe had loss his 3% opportunity cost.

8 0
3 years ago
Darryl’s portfolio includes 66 shares of Essentia Inc., 95 shares of SFT Legal, and 180 shares of Grath Oil. If Essentia Inc. pa
PSYCHO15rus [73]

Answer: d. $579.44

Explanation:

Dividends from Essentia Inc.

= 66*$1.79

= $118.14

Dividends from SFT Legal

= 95*$2.62

=$248.90

Dividends from Grath Oil

=180*$1.18

=$212.4

Total Dividends

=$118.14 + $248.90 + $212.4

=$579.44

Darryl's total Dividends each year amounts to $579.44

7 0
2 years ago
If Frica Morrison a machine operator at Stanley Foundry, makes $513.66 a week and has 33 in FIT withheld, how many allowances ha
exis [7]

Using the <em>Single's Person Weekly payroll</em> distribution , the number of allowances claimed by Frica Morrison will be 3.

<u>Given that</u> :

  • Weekly pay = $513.66
  • Federal income tax withheld = 33

<em>From the payroll table</em>, Frica's weekly pay falls inbetween $510 - $520 ; checking along the row, we can see from the <em>table(attached)</em> that Federal income tax withheld of $33 falls under the 3 allowances claimed.

This means that for Frica to have $33 withheld from his <em>weekly pay of $513.66</em>, then he must have claimed 3 allowances.

Therefore, the Number of allowances claimed by Frica Morrison is 3.

Learn more :brainly.com/question/17092810?referrer=searchResults

4 0
2 years ago
Which of the following actions has NO impact on your credit score?
Romashka-Z-Leto [24]
When you inquire about a credit card charge, then it has no impact on your credit score. The correct option among all the options given in the question is option "A". Nowhere around the world can there be any rules that can deduct the credit rating of a person for inquiring about a credit card charge. It would be absolutely ridiculous.
8 0
3 years ago
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