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Nat2105 [25]
3 years ago
5

g You deposit $1,900 in your savings account that pays an annual interest rate of 3.25%. If the inflation rate is 1.09%, by how

much will your purchasing power increase in percentage terms
Business
1 answer:
gayaneshka [121]3 years ago
6 0

Answer:

Real purchasing power increase= 2.16%

Explanation:

Giving the following information:

You deposit $1,900 in your savings account that pays an annual interest rate of 3.25%. The inflation rate is 1.09%.

In this example, we have two different and opposite effects. The interest rate increases your purchasing power. If the inflation rate is 0, the purchasing power will increase (in one year) 3.25%.

The inflation rate decreases the purchasing power of nominal income.

Real purchasing power increase= annual interest rate - inflation rate

Real purchasing power increase= 3.25 - 1.09= 2.16%

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nirvana33 [79]

Answer:

B, A

Explanation:

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3 years ago
Use the information in the chart to calculate the real exchange rate between the U.S. dollar and the Indian rupee. Round to the
JulsSmile [24]

Answer: 52.51 rupees/dollar

Explanation:

The real exchange rate attempts to account inflation in the countries being compared by using prices in the exchange rate.

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Real exchange rate = Nominal exchange rate *(Price index of domestic country/Price index of foreign country)

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3 0
3 years ago
On January 1, a company issues bonds dated January 1 with a par value of $730,000. The bonds mature in 3 years. The contract rat
quester [9]

Answer:

a. Debit interest expense $38,500; credit discount on bonds payable $2,000; credit cash $36,500

Explanation:

As the bonds are sold less than the face vaue then it is said the bonds are issued on discount, we need to calculate the discount on the bond

Discount on the bond = Face value of bond - Issuance value of bond = $730,000 - $718,000 = $12,000

The discount will be amortized over the life of the bond

The first interest and its amortization is as follow

Cash Payment = Face value x Coupon rate x Semiannual fraction = $730,000 x 10% x 6/12 = $36,500

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The cash will be credited by $36,500

The bond liability will be credited by $2,000

Hence the interest exepense will be debited by $38,500 ( $36,500 + $2,000 )

6 0
3 years ago
So people; how u doin? lol bored
velikii [3]

Explanation:

im doing good how about you

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2 years ago
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