1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
goblinko [34]
1 year ago
14

suppose that lenders want to receive a real rate of interest of 5%, and that they expect inflation to remain steady at 3% in the

coming years. based on this, lenders should charge a nominal interest rate of
Business
1 answer:
HACTEHA [7]1 year ago
7 0

The interest rate is 7%.

<u>Solution:</u>

The real rate of interest is always above the nominal interest rate when inflation is positive. In this case, we are told inflation is 3%. Since the real rate of return is the nominal interest rate minus inflation, we need a nominal interest rate of <u>5%+3%=8%</u> to get a real interest rate of 5%.

To calculate the real interest rate subtract the inflation rate from the nominal interest rate. Mathematically it looks like this The real interest rate is the nominal interest rate minus the inflation rate. Creeping inflation is a type of inflation in which the price level rises steadily at a moderate rate over an extended period of time.

Learn more about The interest rate here:-brainly.com/question/25793394

#SPJ4

You might be interested in
How have ATMs evolved since then? Have you used one? Explain.
olga2289 [7]
<h2>The following points describe how have ATMs evolved since their first setup: </h2>

  • The very first ATM that came out in 1967 functioned with paper printed on with radioactive ink that the machine could read to process the information.
  • The more popular type of ATMs came out two years later in 1969 and were disseminated throughout the United States over the next decade.
  • The new ATMs used plastic cards similar to the cards that we use today.
  • Both the types of cards and the interface of the ATMs changed with time.
8 0
3 years ago
Read 2 more answers
The cost of an asset is 1,100.000 ands its residual value is 140,000 estimated useful life of the asset is eight years. Calculat
Dahasolnce [82]

Answer:

Year2= $180,000

Explanation:

Giving the following information:

The cost of an asset is 1,100,000 and its residual value is 140,000 estimated useful life of the asset is eight years.

To calculate the depreciation expense for each year, we need to use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Year1= [(1,100,000 - 140,000)/8]*2= 240,000

Year2= [(960,000 - 240,000)/8]*2= $180,000

3 0
3 years ago
I just failed my test what happen
balandron [24]

If you did fail or perform under your expectations, then talk to your professor. He or she will have the most perspective on what you did right and wrong this previous time, and tips for studying better for the next exam. ... Also, try to find a top student in the class and ask them how they study.

  • Don't Panic. If you've always done well in school — or even if you haven't — a failing grade can come as a shock. ...
  • Carefully Review Your Exam. When I failed my chemistry exam, I barely looked at the test. ...
  • Make a Plan. ...
  • Go to Office Hours. ...
  • Prepare for the Next Exam.
7 0
2 years ago
How can the loan decisions of individuals and private bankers contribute to the instability in the macroeconomy
Lesechka [4]
Loan decisions made by both individuals and banks contribute greatly to the macroeconomy. Since everyone participates in the macroeconomy at large everyone is in some way tied together in terms of the ability to get and control credit. From this perspective many banks were willing to loan money to individuals based on the assumption that even if they couldn't make the payment the increase in house values would be enough to cover any potential losses. The issue arose when too much credit was extended, housing slowed and then there was little demand for new houses. This started a cascade of issues in the macroeconomy in terms of a housing bubble, an end to easy credit and a situation in which individuals and banks both had to be bailed out in order to prevent a complete collapse of the macroeconomy as a whole.
While private bankers made the loans there are also individuals that take loans that they know they can't repay or don't plan for situations in which they can't make a payment if something were to go wrong in terms of their job or a family issues that may arise. For this reason individuals are also responsible at a microlevel for the problems created at the macro level as a whole for the economy. Such borrowing had to end immediately to stave off future failures of banks who may not have had the liquidity and solid financial backing to survive such a predicament.
5 0
3 years ago
Ace Co. prepared an aging of its accounts receivable at December 31, 2014 and determined that the net realizable value of the re
Papessa [141]

Answer:

uncollectible accounts expense 28,000

Explanation:

the aging of the accounts receivable is 600,000

AR unadjusted 650,000

We need to adjust by 50,000 to get the net realizable value

allowance:                      68,000

written off                      (46,000)

uncollectible expense  <u>           X</u>

year end                         50,000

68,000-46,000 + uncollectible = 50,000

uncollectible = 50,000 -22,000 = 28,000

5 0
3 years ago
Other questions:
  • Transfer payments are:
    5·1 answer
  • In one year, you meet 52 people who are each unemployed for one week and eight people who are each unemployed for the whole year
    8·2 answers
  • 1.Danner Company expects to have a cash balance of $45,000 on January 1, 2017. Relevant monthly budget data for the first 2 mont
    5·1 answer
  • " The high cost of implementing changes to infrastructure always raises questions about priorities. Should investments in infras
    12·1 answer
  • Dingo Division’s operating results include: controllable margin of $150,000, sales totaling $1,200,000, and average operating as
    13·1 answer
  • Fully explain the differences between the following, using examples: a. Trade-offs and Opportunity Cost b. Normative and Positiv
    10·1 answer
  • If demand increases and supply stays the same, there will be a _____. Lower equilibrium price and quantity lower equilibrium pri
    11·2 answers
  • Using the GLOBE study results and other supporting data, determine what Japanese managers believe about their subordinates. How
    13·1 answer
  • c) What do you expect will be the impact of the increased fines in the (i) earnings and (ii)management compensation contracts, o
    11·1 answer
  • When person a gains power because a has knowledge or expertise relevant to b, _______ power is demonstrated.
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!