Answer:
Real interest Rate = Nominal Interest rate - Inflation
= 7% - 2% = 5%.
If the nominal interest rate is 7% and the inflation rate is 2%, what is the...
If the nominal interest rate is 10% and the inflation rate is 5%. What is the real interest rate? (Do not round intermediate calculations. Round your answer to 2 decimal places) 4.76 5.13 2.34 5.00 0.4 Question 2 FinanceCorp has fixed costs of $12 million and profits of $4 million. What is its degree of operating leverage (DOL? (Do not round intermediate calculations. Round your answer to 2 decimal places) 2.50 3.30 4.00 1.00
If the rate of inflation is 5.7 %, what nominal interest rate is necessary for you to earn a 2.2 % real interest rate on your investment? (Note: Be careful not to round any intermediate steps less than six decimal places.) The nominal interest rate is ____%. (Round to two decimal places.)
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What is the real interest rate if the nominal interest rate is 7% and the expected inflation rate is 5% over the course of a year? ir = (Round your response to two decimal places.)
If the rate of inflation is 5%, what nominal interest rate is necessary for you to earn a 3% real interest rate on your investment? The nominal interest rate is %. (Round to two decimal places.)
You will receive $100 from a zero-coupon savings bond in 3 years. The nominal interest rate is 7.80%. a. What is the present value of the proceeds from the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present Value: b. If the inflation rate over the next few years is expected to be 2.80%, what will the real value of the $100 payoff be in terms of today’s dollars? (Do not round intermediate calculations. Round...
You will receive $100 from a zero-coupon savings bond in 3 years. The nominal interest rate is 8%. a. What is the present value of the proceeds from the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If the inflation rate over the next few years is expected to be 3%, what will the real value of the $100 payoff be in terms of today’s dollars? (Do not round intermediate calculations. Round your answer...
You will receive $100 from a zero-coupon savings bond in 4 years. The nominal interest rate is 8.20%. a. What is the present value of the proceeds from the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If the inflation rate over the next few years is expected to be 3.20%, what will the real value of the $100 payoff be in terms of today’s dollars? (Do not round intermediate calculations. Round your answer...
you will receive $100 from a zero-coupon savings bond in 2 years. The nominal interest rate is 8.10%. If the inflation rate over the next few years is expected to be 3.10%, what will the real value of the $100 payoff be in terms of today’s dollars? (Do not round intermediate calculations. Round your answer to 2 decimal places.) -answer is $94.08.. but my Q is this.... d. Show that the real payoff from the bond [from part (b)] discounted...
Problem 2-4 (similar to) (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real rate is 3.7 percent and the expected inflation rate is 7.1 percent? The nominal rate of interest is %. (Round to two decimal places.)