In economics, the Fisher equation is used to determine the
relationship of the nominal interest rate and the real interest rate. This
equation takes into account the effect of inflation. Mathematically this is
expressed as:
Real rate = -1
The values given are:
Nominal rate= 10% =
0.1
Inflation=5%=0.05
Substituting known
values and by calculation:
<span>Real rate=0.0476 =
4.76%</span>
Answer:
Brand association
Explanation:
Brand association is anything which is deep seated in customer's mind about the brand. Brand should be associated with something positive so that the customers relate your brand to being positive. Brand associations are the attributes of brand which come into consumers mind when the brand is talked about.
Answer: $330
Explanation:
The Net cash received is the Total Money received minus the Total money paid.
The total money paid is calculated as such,
= $1,000 x 97%( this a DISCOUNT bond meaning that it was sold for less than Par. This number signifies how much in percentage of Par it was purchased for)
= $970
$970 is the Total Amount paid.
The Total Amount Received would be,
= Principle on Maturity + Interest for 5 years
= 1,000 + 1,000(0.06) * 5 years
= $1,300
Net Cash Received is therefore,
= Total Amount Received - Total Amount Paid
= 1,300 - 970
= $330
$330 is the net cash received over the life of the bond investment.