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Oksana_A [137]
3 years ago
8

The difference between the nominal interest rate and the real interest rate is

Business
2 answers:
leonid [27]3 years ago
8 0

Answer: the correct answer is letter D. the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.

Explanation: in financial maths when you speak about "real" rates you should consider the inflation impact.

anyanavicka [17]3 years ago
8 0

Answer:

D. the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.

Explanation:

The nominal interest rate is that interest rate that is advertised by the financial institutions either as interest on loan or deposit. Since it is the interest rate stated in financial instruments like the ones quoted on bonds, it is also seen as the stated interest rate.

The real interest rate is the interest rate which has been adjusted to remove the effect of inflation. That is, to get the real interest rate, take the nominal interest rate and subtract the inflation rate. therefore, we can use the following formula.

Real Interest Rate =  Nominal Interest Rate - Inflation Rate.  

In fact the real interest rate can be sen as the real cost of borrowing money.

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Sylvester Co. takes out a 12% loan of $500,000 on 1/1/2014 to finance construction of a building for the company’s own use. Cons
IRINA_888 [86]

Answer:

2014 36,000

205: 24,000

Explanation:

500,000 x 12% = 60,000 construction realted per year

Capitalize:

timeline:

<--/--/--/--/--/--/--/--/--/--/--/--/-->

each month the company is doing an spending related to the construction. We must capitalize based on the amount investment.

The first month capitalize throught the whole year,

the second month 11 months

the third for 10 months and so on.

Therefore, the capitalize amount will be half of the cost of the year

2014: interest capitalized through the cost of construction

600,000/2 x 12% = 36,000

400,000/2 x 12% = 24,000

That's the maximum amount we can capitalize for construction.

7 0
3 years ago
Stellar Corporation had the following activities in 2020.
nexus9112 [7]

Answer:

Net cash provided by financing activities $315,000

Explanation:

The computation of the net cash provided or used by financing activities is shown below:

Issuance of common stock $275,000

Issuance of bonds payable $469,000

Less: Payment of dividends $380,000

Less: Purchase of treasury stock $49,000

Net cash provided by financing activities $315,000

6 0
2 years ago
What are the roles of the control unit and the alu?
makvit [3.9K]
An arithmetic logic unit is a digital circuit used to perform arithmetic and logic operations. It signifies the essential building block of the central processing unit of a computer. The modern central processing unit contain very powerful and complex arithmetic logic unit. In addition to arithmetic logic unit, modern central processing unit contain a control unit.
8 0
3 years ago
Which memo provided advanced general principles to consider in cases involving corporate wrongdoing in that it makes clear that
Gekata [30.6K]

Answer:

E. Thompson memo

Explanation:

The name 'Thompson Memo' was used to honor the Deputy attorney General that first issued the memo in 2003. His name is Larry Thompson.

The memo was created to distinguished the line between the 'honest mistake' that the company might do and an actual wrongdoings that must be punished by law.

The memo consist of several criteria that future prosecutors can use to determine whether a company should be punished or not. Those criterias are:

- The nature/seriousness of the offense

- Whether they did a similar 'mistake in the past

- Whether the company admit the mistake by their own or whether it's exposed by other people

- Whether the company proposed a remedial action.

8 0
3 years ago
Acheron Co.'s December 31, Year 1, balance sheet contained the following items in the long-term liabilities section: Unsecured 5
Butoxors [25]

Answer:

Term bond $725,000

Debenture bonds $775,000

Explanation:

Calculation to determine the total amounts of term bonds and debenture bonds

TERM BONDS

6.5% unsecured convertible bonds of $225,000

Add 4.875% guaranty secured bonds of $500,000

TOTAL term bond total $725,000

($225,000+$500,00

DEBENTURE BONDS

5.375% registered bonds of $550,000

Add 6.5% convertible bonds of $225,000,

TOTAL Debenture bonds $775,000

($550,000+$225,000)

Therefore the total amounts of term bonds will be $725,000 and debenture bonds will be $775,000

4 0
3 years ago
Read 2 more answers
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