Suppose growth rate of Real GDP is 6% and the growth rate of velocity is 3%. If Bangladesh Bank wants to have a 5 % inflation rate, what should be the growth rate of money supply according to the predetermined-money-growth-rate-rule?

Q: Suppose you deposit $469 per week in a bank account for 5 years. The interest rate(APR) is 7.2%,…

A: present value of annuity = P * {1-[1/(1+r)^n]/r} Where, r = rate of interest per period i.e. 7.2%/52…

Q: 2. Calculate the yield to maturity on a simple loan of $12,000 that requires the repayment of…

A: In the given question we are required to calculate the yield to maturity on simple loan using…

Q: 2. If the TVM is the only consideration, what nominal rate will cause all of the banks to provide…

A: The objective of the question is to find the nominal rate that will cause all of the banks to…

Q: tive rate is 10% tive rate is 8% tive rate is 12%

A: Present value of financial liability i.e loan is the present value of future actual cashoutflows…

Q: You are considering investing $10,000 in either U.S. Treasury bills or bank certificates-of-deposits…

A: U.S. Treasury bills are backed by the US Government. CDs issued by banks are backed by Federal…

Q: 2. You need to save up for P5,500 in I year. How much should you save now if the bank offers a rate…

A: >Present value is the value of future value that can be earned today. >This can get…

Q: You wish to put your savings of £5000 into a bank account. There are two different offers from bank…

A:

Q: Hannah wants to have $ 4500 to help pay for a new deck in 7 years. If she wants to put her money…

A: FV = PV * e^(rt)

Q: An investment bank can borrow or lend at LIBOR. Suppose that the 6-month rate is 5% and the 12-month…

A: - 6-month LIBOR rate = 5% (continuously compounded)- 12-month LIBOR rate = 8% (continuously…

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: last year, i took out a loan with an interest rate of 4.24% when inflation was only 1.9%. now…

A: The real interest rate is the inflation adjusted interest rate which is reflecting the increase in…

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: Q10.4. Find the present worth sum of money that would be equivalent to the future amounts of $5000…

A: given, real rate =10% inflation rate =5% future vale = $5000 at year 6 future value =$7000 at year 8

Q: 3) Suppose that on January 1, 2019 a bank lends $20,000 to a person. The bank and the individual…

A: The nominal interest rate and the real interest rate are important elements to determine the cost of…

Q: 3. To pay for college, you borrowed $ 1000 loar Government High Education Fund that make. 126 per…

A: Given information : Borrowed amount = $1000 Amount to be paid per year = $126 Time period = 25 years…

Q: 1) To reactivate the economy, banks offer loans that meet their annual compound interest rates, but…

A: Effective Interest Rate: When compounding interest is paid yearly in arrears instead of monthly, the…

Q: a. As part of your company’s financial planning, you plan to buy a car for your new executive, which…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 7. A company borrowed $100,000 from a bank, which charges them an interest rate of 5% per year.…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrower…

Q: How much money can a company spend now instead of spending $10,000 in year 3, $20,000 in year 4, and…

A: 3 year future value = $10,000 4 year future value = $20,000 5 year future value = $30,000 Interest…

Q: B. Ali believes that with expectations for inflation over the next year, investors require 8% for a…

A: The pure expectation hypothesis: The pure expectations hypothesis states that the return earned on a…

Q: Please help me answer this. Thank you.

A: Given that; The PH debt as of today amounts 12000000000000 The Philippines is estimated to have…

Q: What will the money rate of interest have to be at a 6% inflation rate to entice people to keep the…

A: given, real rate = 5% inflation= 6%

Q: What is the value today of a money machine that will pay $4,016.00 every six months for 23.00 years?…

A: The present value principle states that money spent presently is worth more than money spent…

Q: Q3: Which one of the following two cases would you prefer as more profitable investment and why?…

A:

Q: required reserve ratio is 10%, how much a new $10,000 deposit can a bank lend? What is the pote

A: Introduction : In simple words, the amount of reserves that the federal authorities command the…

Q: Suppose the bank will give you 5 percent interest rate for your money on deposit and the rate of…

A: Nominal interest rate (i) = 5% Inflation rate (f) = 3% r = Real rate

Q: Suppose you make a charge of $1000 to a new credit card, but then charge nothing else and make the…

A: Exponential Decay: A mathematical process that is being used to reduce a certain amount by a…

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: To make Auto loan look more attractive than they really are, some banks advertise that their rates…

A: Step 1 Compound interest is when you receive interest on both your interest income and your savings.

Q: P = ? 2.000.000 6 8.000.000 12 6.000.000 14

A:

Q: You borrow $1,000 from a bank at 6% annual interest and promise to pay it back after a year. As you…

A: the real interest rate equals the nominal interest rate minus the expected inflation rate.…

Q: under time value of money, a one dollar today is the same as a single dollar after 2 weeks. is it…

A: Time value of money is very important concept in the finance.

Q: Straight bank loan. Left Bank has a standing rate of 7.9% (APR) for all bank loans and requires…

A: As you have posted multiple questions, we will solve the first question for you. To get remaining…

Q: b. Mr LEO's father has made a will to give him an amount of $500,000 in 10 years .So Leo wants to…

A: The question is based on the concept of calculating the value of a loan in terms of present value…

Q: You are analyzing how interest rates affect the equity value of a bank using a duration analysis.…

A: Duration Gap in banks is the difference between average Duration of its assets and average duration…

Q: Waleed wants to get a 5.5% of return to his investment in 1 year. In Oman, inflation is 6.74%. What…

A: Required Return on investment = 5.5% Inflation rate = 6.74% Waleed wants to get a return of 5.5% but…

Q: A $4000 initial deposit in a bank account grows continuously according to the formula…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: You want to invest $100 in a project whose cash flows have a duration of 4 years. You invest $10 of…

A: Particular Amount Formula Investment amount $100   Own funds $10   Funds to be borrowed $90…

Q: 3. Suppose you recently bought a house for R1 650 000 and secured a home loan from the bank, with an…

A: Note : As per HONOR code, we cannot provide solution for multiple questions. Here we are solving…

Q: A company is due to receive €2,500,000 two-months from today and wishes to save the funds for three…

A: To calculate the forward rate, we take the average of the lower and upper bounds of the interest…

Q: Describe the steps Acacia should take to profit from shorting euros and going long on dollars, show…

A: When you believe that the price of Euro will fall, you are going to short (sell) euros as the spot…

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”.