I need help with #13 please 11:0611) AbondD) depositinterest rate to bechance of default will cause theA) more variable; lowerB) less variable; higherC) higher; lowerD) higher; higher5G UC ll 82%B)12) Which of the following statements aboutnominal interest and real interest is true?A) Nominal interest is a yearly rateand real interest is a monthly rate.Nominal interest does not adjustfor inflation, whereas real interestdoes.C) Nominal interest is what the lenderreceives and real interest is whatthe borrower pays.D) Nominal interest and real interestare two ways of saying the samething.13) If a bank is lending money at 6.25% whilethe government is lending money at 8.25%and the rate of inflation is 3.5%, what isthe real interest being earned by the bank?A) 2.00%B) 2.66%C) 2.75%D) 6.25%14) If the real interest rate is 7.5% and the rateof inflation is 3%, what is the nominalinterest rate?A) 4,50%

13) The nominal interest rate refers to the growth rate of money. This is expressed annually, i.e.…

13) If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%, what is the real interest being earned by the bank? A) 2.00% B) 2.66% C) 2.75% D) 6.25%

13) If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%, what is the real interest being earned by the bank? A) 2.00% B) 2.66% C) 2.75% D) 6.25%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

I need help with #13 please

11:06
11) A
bond
D) deposit
interest rate to be
chance of default will cause the
A) more variable; lower
B) less variable; higher
C) higher; lower
D) higher; higher
5G UC ll 82%
B)
12) Which of the following statements about
nominal interest and real interest is true?
A) Nominal interest is a yearly rate
and real interest is a monthly rate.
Nominal interest does not adjust
for inflation, whereas real interest
does.
C) Nominal interest is what the lender
receives and real interest is what
the borrower pays.
D) Nominal interest and real interest
are two ways of saying the same
thing.
13) If a bank is lending money at 6.25% while
the government is lending money at 8.25%
and the rate of inflation is 3.5%, what is
the real interest being earned by the bank?
A) 2.00%
B) 2.66%
C) 2.75%
D) 6.25%
14) If the real interest rate is 7.5% and the rate
of inflation is 3%, what is the nominal
interest rate?
A) 4,50%

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