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balandron [24]
3 years ago
15

Chloe has a​ $15,000 personal loan at a nominal interest rate of 8 percent. If the inflation rate is 3 percent what is the real

interest rate paid on the​ loan?
Business
1 answer:
Gnoma [55]3 years ago
7 0

Answer:

5 percent

Explanation:

The nominal interest rate is defined as the interest rate before adjusting for inflation. It is the interest rate stated by lenders when issuing out loans. Inflation erodes the strength of a currency. For depositors to profits from their savings, the nominal rate must be greater than the inflation rate.

The difference between the nominal rate and the inflation rate is the rear rate of return. The rear rate is the actual gain or the cost of borrowing or savings. For chloe, the real rate is the amount the lender will be earning from the personal loan advanced to her. It is the nominal rate adjusted for inflation. The rate is 8 percent, minus 3 percent.

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Which of the following is a false statement?
astraxan [27]

D) All states have a flat state tax.

8 0
2 years ago
You own a bond that pays $64 in interest annually. The face value is $1,000 and the current market price is $1,062.50. The bond
drek231 [11]

Answer:

the yield to maturity of this bond is 5.7%

Explanation:

given data

pays interest annually C =  $64

face value F = $1,000

current market price P = $1,062.50

bond matures n = 30 years

solution

we get here yield to maturity that is express as

yield to maturity =

yield to maturity = [C+ (F-P) ÷ n] ÷ [(F+P) ÷ 2   ]     .................1

put here value and we get

yield to maturity = \frac{64+(1000-1062.50)}{11}  ÷ \frac{(1,000+1,062.50)}{2}

yield to maturity = 0.057

so that the yield to maturity of this bond is 5.7%

6 0
3 years ago
Mittelstaedt Inc., buys 60 percent of the outstanding stock of Sherry, Inc. Sherry owns a piece of land that cost $207,000 but h
vovikov84 [41]

Answer:

A. $549000

Explanation:

Given information

Number of outstanding stock of Sherry, Inc = 60%

The cost of the land = $207,000

Fair value at the acquisition date = $549,000

By considering the above information, the value reflected in a consolidated balance sheet is $549,000.

The historical principle says that the fixed assets should be recorded at the purchase price or acquisition cost only and the same is to be considered

8 0
3 years ago
Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable productio
elixir [45]

Answer:

A. Reject (Alternative 1) $0.00

Accept (Alternative 2) $1.12

Differentials Effect on income (Alternative 2) $1.12

B. Accepted (Alternative 2)

Explanation:

a. Preparation of a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order.

DIFFERENTIAL ANALYSIS

Reject (Alternative 1) or Accept (Alternative 2)

March 16

Reject Accept Differentials Effect on income

(Alternative 1) (Alternative 2) (Alternative 2)

Revenue per unit $0.00 $7.20 $7.20

Costs:

Variable manufacturing costs per unit

$0.00 -$5.00 -$5.00

Export tariff per unit

$0.00 -$1.08 -$1.08

($7.20*15%=$1.08)

Income (Loss) per unit $0.00 $1.12 $1.12

b. Based on the above differential analysis

the special order should be ACCEPTED (Alternative 2).

5 0
3 years ago
Master Production Scheduling is a process that brings all the demand and supply plans for the business (sales, marketing, develo
kow [346]

Answer:

False

Explanation:

Master Production Schedule, is used to determine when the materials will be used to produce an item.

Master Production Schedule (MPS) gives a formal detail of the production plan and converts this plan into specific material and capacity requirements. The requirements with respect to labor, material and equipment are then assessed.

Master production scheduling helps keep customer delivery promises through delivering in a timely and cost-effective manner.

5 0
3 years ago
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