A country recorded GDP of $400 million in 2020 and $460 million in 2021. If the inflation rate between the two years was 10 per cent, the approximate real growth rate was?

Q: 15. Your portfolio increased its value in 10% in 2020, 15% in 2021 and 22% and 2022. What was the…

A: Average annual rate of increase can be calculated by using equation below.

Q: 15. The real rate of return in Sudan was expected to be 4% and inflation there was 82.4% in 2020.…

A: STEP 1 Nominal Rate of Return The amount of money made by an investment before deducting costs like…

Q: Revenue from a project is expected to be $7000 per year in real terms (i.e. an identical project…

A: Real Value (P) = $7,000Inflation rate (r) = 2.4% or 0.024Number of years (n) = 8

Q: If the international fisher effect holds, and if the following information is given, what should be…

A: The International Fisher Effect (IFE) is an economic theory stating that the expected disparity…

Q: Assume that between 2005 and 2015 the price level doubled. What is the approximate average annual…

A: Solution:Average annual rate means the rate on per annum basis.We know, average annual rate =…

Q: An investment will pay you $4,611.9 in 3 years if you pay $1,376.68 today. What is the implied rate…

A: Rate of return = (Future value / Present value)^(1/Time) - 1 where, Future value =  $4,611.9 Present…

Q: What will be the approximate population of the United States, if its current population of 280…

A: To calculate the population after 25 years we will use the below mentioned formula   Population…

Q: In the United Kingdom, the inflation rate is 1.8 per cent per year and that T-bills currently yield…

A: Inflation rate in UK = 1.8 % Current Yield in UK T-Bills = 2.1%

Q: ose that the current exchange rate between the Japanese yen (¥) and the U.S. dollar ($) is ¥100 =…

A: According to the purchase power parity the prices must be in equilibrium with each other and should…

Q: same table - using the CPI method, calculate inflation/deflation from 2020 to 2022: CPI Method…

A: Step 1: Step 2: Step 3: Step 4:

Q: In 10 years from now, how many future dollars will have the same buying power as $24,000 today? The…

A: Future value refers to the value of annuity at future date. It is the value determined when…

Q: Suppose that the US price index is 100.0 in 1985 and 216.4 in 2015 (30 years). What is the average…

A: Here, US Price Index in 1985 is 100 US Price Index in 2015 is 216.4 Time Period is 30 years

Q: What would be the purchasing power (in today's money) of $1,000 (actual $) in 10 years' time from…

A: Future value = fv = $1000 Time = t = 10 years Inflation rate = r  = 5%

Q: The most recent 12-month inflation forecast for the United States is 6.65 percent (from March 2022…

A: Purchasing power parity refers to the state of equilibrium of exchange rate between currencies when…

Q: An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next…

A: Internal rate of Return:  IRR is a discounting cash flow technique gives rate of return earned by…

Q: Consider the following table for an eight-year period:   Year T-bill return Inflation 1 7.47 % 8.53…

A: A short-term risk-free financial instrument that is backed by the government, and also has a…

Q: The graph depicts yield curves for 5 November 2021, 5 November, 2022, and 5 November, 2019. The…

A: The yield curve and the forward rates: The yield curve shows the expected yields of a class of debt…

Q: Suppose that the real interest rate in Japan and the U.S. is 2.00%. Furthermore, assume that the…

A: According to the International Fisher Effect theory, the expected inflation rate will be the…

Q: The interest rate on Indian government securities with one-year maturity is 8%, and the expected…

A: Indian interest rate =7% Indian inflation rate =8% Us interest rates =0.18% inflation =1.5%

Q: If sales are $1,150,000 in 2025 and this represents a 15% increase over sales in 2024, what were…

A: There may be an increase in sales from the previous year to the current one because of the…

Q: The dollar-per-euro spot rate is 1.4457 and the 1-yr forward rate is 1.4194. If inflation in Germany…

A: To find the forecasted inflation rate in the United States, we can use the formula for uncovered…

Q: Suppose that actual inflation is 3 percent, the Fed's inflation target is 2.5 percentage points, and…

A: Working Note #1 Calculation of inflation gap: Actual inflation=3% Target inflation = 2.5% Inflation…

Q: Using the Treasury yield information in part c, calculate the following rates using geometric…

A: Data given: Maturity  (year) Yield 1 5.37% 2 5.42% 3 5.58% 4 5.64% 5 5.56% 10 5.68%…

Q: CHF 229 on 01.01.2022 and CHF 152 on 01.01.2023. The exchange rate between CHF and $ is 1.0575 CHF/$…

A: Price in 2022=229Price in 2023=152Find out price on 2021

Q: Assume the following information: Current spot rate of New Zealand dollar = $.41 Forecasted spot…

A: To determine the potential profits from interest rate arbitrage, we need to consider the given…

Q: Expected inflation in Argentina for next year is 64%. Expected inflation in Europe, for the same…

A: Purchase power parity says that exchange rate of the currency should change based on the inflation…

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.