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3 years ago

Which payment type is the best if you are trying to stick to a budget

1 answer:

5 0

Interest is...The amount owed for borrowing money.Which payment type can help you stick to a budget?Debit cardsIf you are planning to carry a large balance on your credit card, which of the following credit card features should you look for?Low APR

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ou read in a newspaper that the nominal interest rate is 12 percent per year in canada and 8 percent per year in the u.s. suppos

diamong [38]

The real interest rate in US and Canada are same.

As inflation in Canada is higher, its value will depreciate again the US dollar.

This scheme actually loses money as the amount of loan to be returned is 1.08 USD

a. Using Fisher's equation,

nominal interest rate ~ real interest rate + inflation.

real interest rate = nominal interest rate - inflation

Thus, as the real interest rate in US and Canada are same,

Nominal rate Canada - Inflation Canada = Nominal Rate US - Inflation US

12% - inflation Canada = 8% - Inflation US

Inflation Canada = 4% + Inflation US

Thus inflation in Canada will be 4% higher than in US

b. As inflation in Canada is higher, its value will depreciate again the US dollar. i.e the US dollar will get stronger and Canadian dollar will get weak. The change in the value will be 4%.

Let 1 USD = 1 CAD and amount borrowed be $1 in US for a year.

Amount payable in US after 1 year = $1 * (1 + 8%) = $1.08

Amount converted to CAD = CAD 1

Amount in CAD after 1 year = CAD 1*(1+12%) = CAD 1.12

New Exchange rate after 1 year = 1 * (1 + 4%) = 1.04 i.e 1 USD = 1.04 CAD (i.e USD costs more in CAD)

Amount in USD converted from CAD = 1.12/1.04 = 1.0769 ~ 1.077 USD

Thus, this scheme actually loses money as the amount of loan to be returned is 1.08 USD which is more than 1.077USD earned from CAD interest rates. (This is even without considering the exchange rate transaction fees etc.)

The interest rate is the quantity a lender prices a borrower and is a percentage of the essential—the quantity loaned. The hobby charge on a mortgage is typically referred to on an annual foundation referred to as the annual percentage charge (APR).

An interest rate is the amount of interest due in step with length, as a proportion of the quantity lent, deposited, or borrowed. the entire interest on an quantity lent or borrowed depends on the main sum, the hobby price, the compounding frequency, and the duration of time over which it's far lent, deposited, or borrowed.

An interest rate tells you ways high the price of borrowing is, or excessive the rewards are for saving. So, if you're a borrower, the hobby price is the quantity you're charged for borrowing money, proven as a percentage of the total quantity of the loan.

Learn more about Interest rate here : brainly.com/question/25793394

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4 0

10 months ago

There are four basic principles of finance. Which principle correctly describes the following statement: "A dollar today is w

Mekhanik [1.2K]

Answer:

Time value of money

Explanation:

The ability of money kept in a savings deposit to earn interest over time and the increase in the total interest in line with the length of time, brought us to a conclusion that an amount of money to be received now, that is in the present, is worth more than the same amount if received in the future.

The increase in the value of money as a result of interest earned on it, increases the value of money, this concept is what is referred to time value of money.

8 0

3 years ago

__________are products that are designed and produced from the start to meet unusual customer needs or requirements. They repres

Crazy boy [7]

Answer:

Engineered to order.

Explanation:

Is a type of a manufacturing process where the products are designed and are finished to meets the needs, and requirement of the customer.

And are highly customized in nature in order to meet the specif needs of the order. And has a substantial quantity of design and needs the engineering analysis.

8 0

2 years ago

In most cases, whether the contract has not yet been performed (an executory contract) or has been fully performed (an executed

Jlenok [28]

Answer: disaffirm

Explanation:

most cases, whether the contract has not yet been performed (an executory contract) or has been fully performed (an executed contract), the minor may disaffirm the contract.

It should be noted that a contract that is signed by a minor unless in some rare exceptions is normally void and therefore, the minor can disaffirm the contract.

8 0

3 years ago

3 Hame and explain of skills that should be possess by an entrepreneur

vaieri [72.5K]

Answer:

1. Curiosity. Great entrepreneurs are tasked with identifying new problems, identifying potential niche opportunities, refactoring their existing business processes, and innovating. This necessitates a passion for various fields of study and business cases that are outside of one's comfort zone.

2. Time management. Prioritization, milestone definition, execution, and iteration are all critical. None of this would be possible without the proper project management and time allocation methodologies in place to complete the work.

3. Strategic thinking. Learning to break down a problem to its simplest components and identify growth opportunities. Inventive problem-solving and spotting the low-hanging fruit. Defining an MVP's scope and testing concepts in a short amount of time and on a tight budget.

7 0

2 years ago