In 1975, interest rates were 7.85% and the rate of inflation was 12.3% in the United States. What was the real interest rate in 1975? How would the purchasing power of your savings have changed over the year? (Note: Be careful not to round any intermediate steps less than six decimal places.) What was the real interest rate in 1975? Real rate of interest in 1975 was%. (Round to two decimal places.) How would the purchasing power of your savings have changed over the year? The purchasing power over that year did the following: (Select the best choice below.) OA. Increased by 4.45% OB. Declined by 3.96% OC. Increased by 3.96% OD. Declined by 4.45%

Q: Inflation represents the rate of increase of the average price of goods. If inflation decreases from…

A: Inflation is increase in price that growth in prices is given by the inflation negative inflation…

Q: Consider the following table for a seven-year period: Returns U.S. Treasury Year Bills Inflation 1…

A: The real return refers to the return that the investment provides to its holders after the effect of…

Q: . Inflation is expected to average 2.4% per year for the next 44 yea /hat percentage of the…

A: There is decrease in purchasing power due to increase in inflation and over the years this effect is…

Q: (Inflation and interest rates) Assume the expected inflation rate is 4.1 percent. If the current…

A: A financial product's declared or marketed interest rate, such as that on a loan, bond, or savings…

Q: ume the CPI increases from 133.8 to 136.6 over the period. What is the inflation rate implied by…

A: CPI is the consumer price index which shows the prices of goods during year and is used for…

Q: What real interest rate is offered by a savings account with a 13% nominal rate during a period of…

A: Nominal Interest Rate = 13% = 0.13Inflation Rate = 6% = 0.06

Q: Consider the following US treasury rate table expressed in percentage. Maturity Yield Last Last…

A: The conceptual formula used:

Q: 5. In Zimbabwe rates of inflation were very high in 2010 (indeed, much higher than the rate used in…

A: Real rate of interest is the interest which the lender gets in his hands. In other words real rate…

Q: If an investment grew by 9% while it had a change in purchasing power of 7%, what was the inflation…

A: Real Rate: It is the rate which the investor would receive by investing the money. The real rate of…

Q: Inflation, nominal interest rates, and real rates From 1991 to 2000, the U.S. economy had an annual…

A: Given, Inflation Rate =3.88% Annual nominal risk-free rate = 5.98%

Q: In 1975, interest rates were 7.85% and the rate of inflation was 12.3% in the United States. What…

A: The term "real rate of interest" refers to a rate that has been adjusted to account for inflation…

Q: The nominal rate of interest would be %.

A: We can define real interest rate as those interest rates which have been adjusted for the inflation…

Q: A payday loan is structured to obscure the true interest rate you are paying. For example, in…

A: (1). We, have to find the two week interest rate and that there are 26 two week periods in one year.…

Q: Suppose we have the following Treasury bill returns and inflation rates over an eight year period:…

A: t bills year treasury bill return - avg return (return - avg return)2 formula 1 10.45% -0.72%…

Q: Inflation and interest rates the following table shows the average nominal interest rate on a…

A:

Q: Your investments increased in value by 14.2 percent last year but your purchasing power increased by…

A: Nominal rate = 14.2%Real rate = 5.4%

Q: What was the average real return for Treasury bills for this time period? (Do not round intermediate…

A: T-bills refers to a debt securities or government bonds issued by the central bank on behalf of the…

Q: Consider the following table for a seven-year period: Returns U.S. Treasury Bills 3.90% 3.75 ITT…

A: A treasury bill can be explained as a money market instrument issued by the government to raise…

Q: . Treasury notes and bonds. Use the information in the following table: What is the price in dollars…

A: The objective of the question is to calculate the price of a Treasury note issued in February 2000…

Q: What was the average rate of inflation over the period of 2000-2016? ____%

A: INTRODUCTION    ANSWERS

Q: Consider the following table for a seven-year period: Year 23456N 7 Returns U.S. Treasury Bills…

A: Real Return= ((1+US treasury Bills)/(1+Inflation rate))-1

Q: Suppose that you want to take out a loan and that your local bank wants to charge you an annual real…

A: Compute the nominal interest rate: Nominal interest rate is calculated by using following formula:

Q: Data table (Click on the icon here into a spreadsheet.) in order to copy the contents of the data…

A: Concept:The Fisher equation relates the nominal yield (YTM), the expected real rate of return (real…

Q: Find a country that has experienced more than two years of reported negative inflation in the last…

A: The objective of the question is to identify a country that has experienced more than two years of…

Q: and bonds. Ose the iniomiation in the following table: Wnat is the price in dollars of the February…

A: Price of bond is calculated by present value of periodic cash flows and present value of maturity…

Q: In​ 2007, interest rates were about​ 4.5% and inflation was about​ 2.8%. What was the real interest…

A: Nominal Interest Rate = 4.5% or 0.045Inflation Rate = 2.8% or 0.028 Calculation of Real Interest…

Q: Assume that the consensus required rate of return on common stocks is 13 percent. In addition, you…

A: T-bills refers to treasury bills.   It is a debt obligation of short term nature and it is backed by…

Q: . Inflation is expected to average 2.4% per year for the next 44 years. How much money will be…

A: Inflation rate = 2.4% Period = 44 Years Value of goods and service today = $1

Q: he value of your investment increased by 9.77% last year, and your purchasing power decreased by…

A: Inflation is a situation of general increase in prices. Inflation leads to decrease in purchasing…

Q: Your investments increased in value by 11.6 percent last year, but your purchasing power increased…

A: Solution:Inflation rate refers to the difference between the nominal rate and the real rate.So,…

Q: the nominal interest rate per year is 12% and the inflation rate is 8%, what is the real rate of…

A:

Q: the nominal interest rate is .07 and the expected inflation rate is .02. The real rate of interest…

A: The real rate of interest refers to the rate which is used for the adjustments for inflations that…

Q: In​ 1975, interest rates were 7.83% and the rate of inflation was 12.42% in the United States. What…

A: The real interest rate is the actual interest that a lender receives after it has been adjusted for…

Q: What is the inflation rate implied by this CPI change over this period?

A: Implied Inflation Rate: It is computed by dividing the change in consumer price index (CPI) by the…

Q: please give me answer relatable

A: A. Average Return The average return is the simple mathematical average of a series of returns…

Q: You observe that the current interest rate on short-term U.S. Treasury bills is 4.86 percent. You…

A: Nominal rate = 0.0486 Inflation rate = 0.0165 Real rate of interest = ?   Real rate of interest is…