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hjlf
3 years ago
7

The CPI is 120 in year 1 and 150 in year 2. All inflation is anticipated. If Gringotts Bank charges an interest rate of 20.00 pe

rcent in year​ 2, the​ bank's real interest rate is nothing​%. ​(Round your response to two decimal places and include a minus sign if necessary.​)
Business
1 answer:
liq [111]3 years ago
3 0

Answer:

Gringotts Bank real interest rate = 20% - 25% = -5%

Explanation:

real interest rate = nominal interest rate - inflation rate

the inflation rate between year 1 and year 2 = [(CPI year 2 - CPI year 1) / CPI year 1] x 100 = [(150 - 120) / 120] x 100 = (30 / 120) x 100 = 0.25 x 100 = 25%

Gringotts Bank real interest rate = 20% - 25% = -5%

since the interest rate is negative, that means that Gringott Bank is actually losing money by lending it at 20% since the inflation rate is much higher.  

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a value exchange

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3 years ago
416,000 people each receive an average refund of $3,600, based on an interest rate of 3 percent, what would be the lost annual i
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Answer:

$44,928,000

Explanation:

The fact that 416,000 received a refund of $3,600 each means that the tax authority would lose the interest income that could have been generated on the total refund amount based on a 3% interest rate of return.

Lost annual income=number of people who got refund*average refund per person*interest rate of return

number of people who got refund=416000

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3 years ago
The ppt slides suggest the use of control charts and using deming's ideas of quality control to help with the management of asth
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6 0
4 years ago
The managers of a car dealership have decided to utilize the Hawthorne effect to increase productivity, which means using camera
Leokris [45]

Answer:

False

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4 years ago
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3 0
3 years ago
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