In most financial and economic analyses, we use: Select one: O a. Compound interest rate calculations. O b. Nominal interest rate calculations. Oc. Simple interest rate calculations O d. Simple or nominal interest rate only.
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Q: MACROECONOMIC
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- If you receive 500 in simple interest on a loan that you made for 10,000 for five years, what was the interest rate you charged?Imagine that a local water company issued 10,000 ten-year bond at an interest rate of 6. You are thinking about buying this bond one year before the end of the ten years, but interest rates are now 9. Given the change in interest rates, would you expect to pay more or less than 10,000 for the bond? Calculate what you would actually be willing to pay for this bond.Calculate the equity each of these people has in his or her home: Fred just bought a house for 200,000 by putting 10 as a down payment and borrowing the rest from the bank. Freda bought a house for 150,000 in cash, but if she were to sell it now, it would sell for 250,000. Frank bought a house for 100,000. He put 20 down and borrowed the rest from the bank. However, the value of the house has now increased to 160,000 and he has paid off 20,000 of the bank loan.
- Suppose Ford Motor Company issues a five year bond with a face value of 5,000 that pays an annual coupon payment of $150. What is the interest rate Ford is paying on the borrowed funds? Suppose the market interest rate rises from 3 to 4 a year after Ford issues the bonds. Will the value of the bond increase or decrease?A mortgage 105m is a loan that a person makes to purchase a house. Table 19.11 provides a list of the mortgage interest rate for several different years and the rate of inflation for each of those years. In which years would it have been better to be a person borrowing money from a bank to buy a home? In which years would it have been better to be a bank lending money?Subject :- Economy
- Compound interest means: Select one: a. That the interest is fixed regardless of unrecovered balance O b. Regular nominal interest rate. O c. That a given interest rate has no impact on the growth of principal. d. That the interest is earned on interest.The effective interest rate can be calculated using the relationship between nominal rate and effective rate. Select one: O True O FalseThe general case of interest rate is simple interest rate. Select one: O True O False
- 8 Don't copy paste ans please[MUST SHOW WORK] In one year you will receive $800. This future payment has a present-day value of $600. What is the underlying interest rate? Select one: O A. 20 percent O B. 37 percent OC. 33 percent D. 25 percent O E. none of the above4. Eleanor makes year-end deposits of 500,000 the first year, 550,000 the second year, 605,000 thethird year, and so on increasing the next year’s deposit by 10% of the deposit in the preceding yearuntil the end of the 10th year. Ronald makes equal year-end deposits of 720,00,000 each year for 10years. A.) Is the gradient of Eleanor’s payments increasing or decreasing?B.) If interest on both funds is 12% compounded annually, who will be able to save more atthe end of 10 years.