The loanable fund's theory of interest shows that interest rates on loans are determined by supply and demand for funds available for lending because higher rates will be due to higher demand for lending while higher supply can reduce lending.
Loanable funds encompass family savings and/or bank loans. because funding in new capital items is regularly made with a loanable price range, the demand and supply of capital are often mentioned in phrases of the demand and delivery of loanable funds.
The delivery of loanable finances is based on financial savings. The demand for loanable budgets is primarily based on borrowing. The interaction between the supply of financial savings and the call for loans determines the actual hobby price and how much is loaned out.
The loanable budget market illustrates the interaction of borrowers and savers in the economic system. it is a version of a marketplace model, however, what is being “bought” and “offered” is cash that has been saved. debtors call for a loanable price range and savers supply loanable finances.
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Answer:
Charles X
Explanation:
Charles X was a king of France between 1824 and 1830 and for the greater part of his life was known as the Count of Artois. During his reign as king, Charles X, whose full name is Charles Phillipe, lowered interest bonds to create funds to pay survivors of the emigres who forfeited their lands. He also restores primogeniture(the right of succession of the throne by first borns). He also enacted the law of death or imprisonment for sacrilege in his support of the Roman Catholic Church.
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Answer:
8% and 4.8%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,294.54
Future value or Face value = $1,000
PMT = 1,000 × 11% = $110
NPER = 20 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 8%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 8% × ( 1 - 0.40)
= 4.8%
