1. A consumer, who is initially a lender, remains a lender even after a decline in interest rates. Is this consumer better off or worse off after the change in interest rates? If the consumer becomes a borrower after the change is he better off or worse off?

Q: a. The present value of $25,000 each year for 4 years at a / percent interest rate b. The present…

A: The formula for calculating the Future Value is: FV= PV(1+r)nwhere,FV= Future ValuePV= Present…

Q: explain each factors of interest rate

A: In economics, an interest rate refers to the amount of money that a borrower has to pay back to a…

Q: The central bank is selling $100 worth of bonds payable in one year. The price it gets today is $98.…

A: Do you understand what the "implied interest rate" is? The implicit interest rate in a commercial…

Q: Grant agreed to lend Kay $1,000 for one year at a nominal rate of interest of 5%. At the end of the…

A: The real interest rate refers to the difference between the nominal interest rate and the inflation…

Q: At this interest rate, the present value of the increase in wages is about the training. Thus, from…

A:

Q: Suppose a bond pays annual interest of $50. Compute the interest rate per year that a bondholder can…

A: Detailed explanation:Given that the annual interest paid is $50, and the face values are $200, $500,…

Q: Karrie is a golf pro, and after she paid taxes, her income from golf and her interest from financial…

A: Income refers to the monetary benefit that is gained by an individual from his employment.

Q: You buy a Treasury note for $960. Instructions: Round your answers to two decimal places. a. If you…

A: Annual rate of return is a measure of the amount of money earned or lost on an investment over a…

Q: O Macmillan Learning Diana lives in Japan and is concerned about the future purchasing power of the…

A: Asset Demand for Money: This demand occurs when people or companies keep money on hand as a means of…

Q: What are the factors the can keep interest rates high? discuss it with the help of articles in…

A: A charge known as an interest rate is associated with lending money. Interest provides some…

Q: Describe how interest could be  good or bad, depending on the situation, and explain why interest…

A: If properly managed, a LOW INTEREST RATE can be beneficial. Low interest rates reduce demand for the…

Q: A company calls to notify you that the interest rate on your credit card will increase from 19% to…

A: There is a difference between percentage points and percent change. The percentage points is the…

Q: Suppose you buy a big-screen TV with $1,000 down and $500 per year for the next two years. If the…

A: A person buy a big-screen TV with $1,000 down and $500 per year for the next two years. If the…

Q: You want to have no less than a million dollars in the bank when you retire. You think you can save…

A: Total Savings in the bank during retirement is $1000000Total savings this year is $5000The increment…

Q: Discuss the relationship between nominal and effective interest rates?

A: Macroeconomics is a part of economics that deals with production, decision and allocation concerning…

Q: what happens when interest rate rises?

A: In an economy interest rate plays an important role to determine economic growth and inflation rate.…

Q: Do the interest rates reflect the market interest rate?

A: An amount of money due per period as a proportion of the loan, deposit, or borrowing amount is…

Q: If the interest rate is 10%, what is the present value of $25,000 received two years from now? A.…

A: Present value is a concept based on the time value of money which states that a sum of money today…

Q: 10. Suppose the interest rate is 5% and that you are to receive three annual payments of $10,000,…

A: The present value is an important financial concept popularly used by business firms and individuals…

Q: Suppose that the interest rate is 4 percent. What is the future value of $100 four years from now?…

A: Interest rate = 4%Principal amount = $100

Q: Chairman Latrobe, the Supreme Leader of Rolling Rock decided to        increase the personal tax…

A: Note: Since you have posted multiple independent questions in the same request, we will solve the…

Q: Hi! Can you help me with the question below? Matt has the choice between receiving $100 now or…

A: Matt has the choice between receiving $100 now or receiving $140 in two years. Simple interest…

Q: Real rate of interest does not change with maturity. Is that right

A: The nominal interest rate refers to that which is quoted by a financial institution or lender…

Q: If you hold a bond at a time when the market interest rate is increasing, you will find that the…

A: Interest Rate Risk: The phenomenon of an inverse relationship between market interest rates and bond…

Q: what is the 4 factor that affects the level of interest rate? and how does each one work?

A: The cost of lending money is represented by an interest rate. On the other hand, it is a reward for…

Q: what happens if consumers expect future interest rates to fall?

A: An interest rate is the amount of money a lender charges a borrower for the use of money, expressed…

Q: This person earns $1000 of income today and $2000 income next year. Point C represents his…

A: The budget line/constraints for a two-period consumption is given by [Ct+Ct+1/rt+1]=[Yt+Yt+1/rt+1]…

Q: Explain with graphics) A consumer, who is initially a lender, remains a lender even after a decline…

A: Even if interest rates fall, a customer who was formerly a lender remains a lender.  This customer…

Q: Suppose Tom is 20 years old. He works till 50 years old, retire, and live up to 80 years old.…

A: The age of tom = 20 years Total working-age = 50 -20 = 30 years Total not working age = 80 - 50 = 30…

Q: K Uncoventional monetary policy: financial policy and quantitative easing Suppose that the IS and LM…

A: Given information IS function: Y=C*(Y-T)+I*(Y, r+x)+G LM: r=r* C= consumption Y= income level Y= tax…

Q: You will need $100,000 in seven years to buy a new car. How much money do you need to deposit in the…

A: Present value is the value of investment in today's dollar.   Future value is the value of…

Q: What might cause interest rates to be low one year and high the next?

A: Interest rates are best thought of as the "cost of money." If a borrower wishes to spend more money…

Q: Selim has no income in period 1 (consumption now) and an income of 1800₺ in period 2 (consumption…

A: here we calculate the maximum amount the Salim can borrow in period 1 by the following method as…

Q: How can market forces of supply and demand affect interest rates and the economy

A: The demand and supply affect interest rates in the money market. The money market is the market that…

Q: Akhisha wanted to buy a cell phone which will have a price of P13,000 for 90 days from now due to…

A: Given  The future value of cell phone 60 days from now = P13000 Rate of interest =12% simple…