If the inflation rate was 3.00% and the nominal interest rate was 4.60% over the last year, what was the real rate of interest over the last year?Disregard cross-product terms; that is, if averaging is required, use the arithmetic average. Round intermediate calculations to four decimal places.1.84%1.36%2.00%1.60%

Real rate of interest is refer as an interest rate which has been adjusted to eliminate the impact…

Answered: If the inflation rate was 3.00% and the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Treasury bills are currently paying 6 percent and the inflation rate is 3.30 percent. What is the approximate real rate of interest? (Round your answer to 2 decimal places. (e.g., 32.16)) Approximate real rate %
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1.A bank CD that pays 7.38 percent compounded quarterly. (Round answer to 2 decimal places, e.g. 15.25%.) what is the effective annual rate %? 2. A bank CD that pays 7.38 percent compounded monthly. (Round answer to 2 decimal places, e.g. 15.25%.) whats is the Effective annual rate %?
1. If the stated annual rate of interest compounded annually is 8% then what is the equivalent annual rate compounded daily? Pls show formula used. Final dollar answers should be rounded to two decimal places. Interest rate answers should be rounded to 6 decimal places if expressed as a decimal or 4 decimal places if expressed as a percent. Use timeline if necessary. No excel .Thanks!
Find the APY corresponding to the following nominal rate. 8% compounded quarterly The APY is %. (Type an integer or a decimal. Round to the nearest hundredth as needed.)
If wages grew 6.60 percent, but inflation was 4.50 percent, what was the approximate real increase in wages? (Enter your answer as a percent rounded to 2 decimal places.)
13 When interest is calculated for periods shorter than a year, the formula to calculate interest is: Multiple Choice I = P × R × T, where I = interest calculated, P = principal, R = annual interest rate, and T = number of months. I = P × R × T, where I = interest calculated, P = principal, R = annual interest rate, and T = (number of months ÷ 12). I = P × R × T, where I = interest calculated, P = principal, R = monthly interest rate, and T = (number of months ÷ 12). I = (MV − P)/T, where I = interest calculated, MV = maturity value, P = principal and T = number of months.
The figure shows a graph that compares the present values of two ordinary annuities of $900 quarterly, one at 5% compounded quarterly and one at 9% compounded quarterly. Dollars 70000 60000 50000 40 000 30.000 20 000 10000 0 20 40 60 80 100 120 140 Quarters @ (a) Determine which graph corresponds to the 5% rate and which corresponds to the 9% rate. The higher graph is the one at 5% and the lower one is the one at 9% O The lower graph is the one at 5% and the higher one is the one at 9% (b) Use the graph to estimate the difference (in dollars) between the present values of these annuities for 25 years (100 quarters) $1078497
What is the effective annual rate (EAR) (in percent) if the stated rate, or APR, is 2.95 percent and there are 207 compounding periods per year? Answer to two decimals. 4
The bank is paying 11.29% compounded annually. The inflation is expected to be 12.22% per year. What is the market interest rate? Enter your answer as percentage, without the % sign. Provide 2 decimal places. For example, if 12.34%, enter: 12.34

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