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sergeinik [125]
3 years ago
8

Suppose you borrow $1,000 of principal that must be repaid at the end of two years, along with interest of 5 percent per year. I

f the annual inflation rate turns out to be 10 percent,
Instructions: Enter your responses rounded to the nearest whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.
a. What is the real rate of interest on the loan?
b. What is the real value of the principal repayment?
Hint: Future value = Present value × (1 + Growth in prices)t, where t is the number of years evaluated, e.g., The real value of loan repayment = Amount of loan × (1 + Real interest rate)t
c. Who loses, the debtor or the creditor?
Business
1 answer:
gogolik [260]3 years ago
8 0

Answer:

Following are the solution to the given question:

Explanation:

For point a:

Calculating the Real rate of interest:

\to 5\%-10\%\\\\\to -5\%

For point b:

Calculating the Real value of loan repayment:

\to \$1000 (1-0.05)^2\\\\\to \$902.5

For point C:

In this question, the creditor receives less than what he granted he losses that's why the creditor is the correct answer.

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Stories Company purchased equipment and these costs were incurred:Cash price $22,500Sales taxes 1,800Insurance during transit 32
Harrizon [31]

Answer:

d. $25,050.

Explanation:

The computation of the acquisition cost is shown below:

= Cash price of equipment + sales tax + Insurance during transit + Installation and testing

= $22,500 + $1,800 + $320 + $430

= $25,050

To find out the acquisition cost, we have to consider all that cost which is related to the purchase of equipment. Since, all the costs are related, so we have to take all costs which are mentioned in the question.

4 0
3 years ago
Which of the following is the principle of management dedicated to the structuring of resources to support the accomplishment of
yaroslaw [1]

Answer:

a. organization

Explanation:

There are basic five principal of Management:

  • Planning
  • Organization.
  • Controlling
  • leading
  • Staffing

These basic five principal make an average manager to a successful manager.

Planning in management play a vital role as it is about choosing the right process and active objective of organization.

Organization is about structuring of resources and managing relationship with worker to acchieve organization´s goal.

Leading is about inspiring and motivating others in the organization to make vision of organization realistic and achievable.

Staffing is about recuiting and allocating right person at a right job.

Controlling is about evaluating the process and goal of organization.

6 0
4 years ago
Kellie wants to buy an expensive purse from a local accessory store. As a savvy consumer, Kellie wants to find an exact brand at
Deffense [45]

Answer:

An ONLINE TO OFFLINE STRATEGY

Explanation:

An online to offline strategy is a business strategy that is mostly utilized by some organizations to bring customers from the internet and many online platforms to come down to their physical shops and stores and make their purchases. It simply involves the ability to identify potential customers over the internet and other online platforms and then make judicious use of a lot of avenues, ways, and approaches through discounts and the likes to tempt or attract these identified potential buyers to now come over and buy from their stores and physical locations.

Now, Kellie who wants to find and buy the best brand at the right price can only be located and engaged through out her customer journey by an accessory store from the time she begins her research (online) to the time she would now make the actual purchase (offline) only if the store makes use of the ONLINE TO OFFLINE STRATEGY.

4 0
4 years ago
Read 2 more answers
Which of the following would be considered an example of rent seeking? A. lobbyists securing spending policies that benefit thei
maks197457 [2]
I think the correct answer would be politicians trading favors that do not benefit the mass populace of voters. Rent seeking is a practice that involves the use of public policy in order to get benefit from it like increasing their benefits in the expense of other. This oftentimes done by a number of politicians.
4 0
3 years ago
suppose the real rate is 3.4 percent and the inflation rate is 5 percent. what rate would you expect to see on a treasury bill?
Ghella [55]

the rate expected on the treasury bill is 8.57%. enter answer as a percent rounded to 2 decimal places.

The real rate is 2.1 percent

The inflation rate is 3.4 percent

To find the rate which is to be expected on a treasury bill we have to apply fisher's equation

1+R= (1+r)(1+h)

Therefore, the rate on the treasury bill can be calculated as follows

1+R= (1+r)(1+h)

r= 3.4%

= 3.4/100

= 0.034

h= 5%

= 5/100

= 0.05

R= (1+r)(1+h)-1

= (1+0.034)(1+0.05)-1

= (1.034×1.05)-1

= 1.0857-1

= 0.0857×100

= 8.57%

A Treasury invoice (T-invoice) is a brief-term debt obligation backed via the U.S. Treasury Department with an adulthood of one year or less. Treasury bills are generally bought in denominations of $1,000 even as a few can attain a denomination of $five million.

let's say an investor purchases a par price of $1,000 T-bill with an aggressive bid of $950. whilst the T-invoice matures, the investor is paid $1,000, thereby income $50 in interest on the funding.

U.S. Treasury bills are auctioned on a regular schedule. individuals should purchase T-payments from the government using the TreasuryDirect internet site. it is free to register, and it'll function like a brokerage account that holds your bonds. in addition to bidding on new troubles, You also can install reinvestments into securities of an equal type and time period. as instance, you can use the proceeds from a maturing fifty-two-week invoice to shopping for some other fifty-two-week invoice. sure brokerage corporations can also permit buying and selling in U.S. Treasuries.

To learn more about treasury bills visit here:

brainly.com/question/17204626

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