Inflation is the economic condition in which the interest rate keeps increasing which is beneficial for the lenders. But not a fixed rate lender.
<h3 /><h3>What is Interest Rate?</h3>
Interest rate is the prevailing market rate which the lender of the money gets in return for the money provided as a loan.
If there is a fixed interest contract the lender will get the same percentage of return for the duration of contract, no matter the fluctuation of the interest rate in the market. This is not beneficial when the economy is facing inflation. As whatever be the rate in the market (definitely higher) the lender will get the same percentage of return.
However if there is a variable rate contract the rate is updated and the lender is paid at the updated interest rate. This is beneficial when the economy is facing inflation.
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Answer:
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Explanation:
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Answer:
Kindly refer to the attached file for the tabular solution
Explanation:
Every transaction flows through the balance sheet and most times the stockholders equity.
This table carefully highlights the impact of each entry to the stockholders equity
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