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frozen [14]
3 years ago
7

Suppose the nominal annual interest rate on a two-year loan is 8 percent and lenders expect inflation to be 5 percent in each of

the two years. The annual real rate of interest is:______.
A. 6 percent.
B. 8 percent
C. 2 percent.
D. 3 percent.
Business
1 answer:
Kisachek [45]3 years ago
5 0

Answer:

C. 2 percent.

Explanation:

The computation of the annual real rate of interest is presented below:

Provided that

Nominal annual interest rate = 8%

Inflation rate = 5%

So, the annual real rate of interest is

Real rate of return = {( 1 + nominal annual rate of return) ÷ ( 1 + inflation rate)} - 1

= {( 1 + 0.08) ÷ ( 1 + 0.05)} - 1

= 2%

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3 years ago
What is the mean cost of repairing a starter if starters for four different vehicles cost $316, $443, $249, and $210 respectivel
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Option C is cotrrect answer - $304.50

<u>Explanation:</u>

The mean is calculated by adding all the values and then dividing it by the number of units. In general terms mean is also called as an average.  

As per the given question:

Mean cost of repairing a starter of four multifarious vehicles is to be found out

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