Over the past year, you earned a nominal rate of interest of 10% on your money. The inflation rate was 5% over the same period. The exact actual growth rate of your purchasing power was 5.0% 4.8% 15.5% 10.0 % 15.0 %

Q: The present worth of a decreasing geometric series is 96157$. The interest rate is 8% per year and…

A: Annuity refers to series of equalized payments that are paid or received at start or ending of…

Q: Shenseea stocking of $4,300 in account today. Shenseeawants to grow for 43 years, nothing Interest…

A: Therefore, the real rate of interest is 1.64%.

Q: Determine the present value in year zero of a gradient series that begins with a cash flow of $7,000…

A: Interest rate = 8% Cash flow in year 5 = $7000 Annual increase in cash flow = 8%

Q: The nominal annual rate of interest is 7%, compounded monthly. Compute the real rate of interest if…

A: Nominal rate of interest is the given rate. This rate does not consider the impact of the…

Q: How much is the sum of the present value of the expected return over those periods

A: Cash Flows (Year 1-10) (CF) =  $15,000 per year Annual interest rate (r) = 5% Time Period (t) = 10…

Q: A series of five constant-dollar (or real-dollar) payments (beginning with $5,000 at the end of the…

A: P = $5,000,g=7% or 0.07,r=12% or 0.12, andn=5 payments.

Q: For each growth rate below, (i) use the rule of 70 to calculate how long it will take incomes to…

A: The rule of 70 is the method of financial management that helps the investors to know the period in…

Q: If the bank paid me 9.98% interest per year and if my actual return (the increase in my purchasing…

A: Nominal rate of return = 9.98% Real rate of return = 5.25%   Inflation Rate= ((1+ Nominal Rate)/(1+…

Q: Determine the value of $5.00 that will grow at a rate of 6% after 20 years. Calculate the future…

A: Given, Present value = $5.00 Annual interest rate (r) = 6% Number of periods (n) = 20 Future value…

Q: Use the following information to calculate the six-month forward rate 1.0 year ahead. Maturity…

A: > From the given information > Calculation of 6 months forward rate 1 year ahead :

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: A bank pays interest at the nominal rate of 8.3% per year. Find the following effective yields.…

A: Variables in the question:Nominal rate=8.3% per yearFormula for calculating effective yield is…

Q: 4. Account A has an annual percentage yield of 2.5% compound interest. Account B has an interest…

A: To calculate the amount of money accumulated in each account after 40 months, we can use the…

Q: Calculate the present worth of a geometric gradient series with a cash flow of 60,000 pesos in year…

A: Present Worth: The notion of present value asserts that a sum of money is worth more now than it…

Q: f the stated interest rate is 10%, number of years is 8 , and market interest rate is 12% compounded…

A: Formula: Present value Annuity factor = [ 1 - 1 / ( 1 + i )N ] / i

Q: An account pays interest at a nominal rate of 3% per year. (a) Find the effective annual yield if…

A: Effective yield refers to return on bond that has its interest payments and is calculated by…

Q: You deposit $10,000 in an account that pays 4.5% interest compounded quarterly. Use the future value…

A: Interest rate (r) = 4.5% compounded quarterly Hence, compounding frequency (k) = 4

Q: A series of five payments in constant dollars, beginning with $6,000 at the end ofthe first year,…

A: The current value of the cash flows or an asset after discounting is termed as the present worth.

Q: An investment of $15,000 was growing at 3.5% compounded quarterly. a. Calculate the maturity value…

A: Maturity value of the investment includes the investment amount & interest earned on the…

Q: An account that compounds interest daily has an annual percentage yield of 5.9%.  What is the annual…

A: The objective of the question is to find the annual interest rate for an account that compounds…

Q: The average inflation rate in Canada is 3% per year. It means that purchasing power of $1 decreases…

A: the total decrease in the purchasing power of money in 10 years when in n  years the decrease is…

Q: 0 years has been 30% and inflation has been 23%. what is your effective raise after accounting for…

A: Given, Raise rate, r = 30% Inflation rate, i = 23%

Q: If the annual interest rate is 12.9% and the dollar amount compounds daily, you would ( a. multiply…

A: Data given: Annual Interest rate=12.9% compounded daily. (Annual means N=1 year)

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: A bank quoted 10% annual interest rate. If the bank compounds the interest rate quarterly, what…

A: Quarterly rate = Annual rate / Number of quarters in a year Quarterly rate =10% /4 Quarterly rate…

Q: Between the years 1974 and 1984​, the average annual inflation rate was 3​%. Find the salary in the…

A: Inflation refers to a rise in the price level over a period of time. This changes the present worth…

Q: Your aunt's $10,000 investment earned a nominal 7% last year. If the inflation rate was 3.75%, what…

A: Nominal rate (r) = 7% Inflation rate (i) = 3.75%

Q: Your investments increased in value by 16.3 percent last year, but your purchasing power increased…

A: Percentage of Increase in Value = 16.3%Percentage of Increase in Purchasing Power = 7.5%

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”.