For a given real interest rate, a decrease in the inflation rate would decrease the after-tax real interest rate and so decrease saving. decrease the after-tax real interest rate and so increase saving. increase the after-tax real interest rate and so decrease saving. increase the after-tax real interest rate and so increase saving

**See Instructions For Solving @ Bottom** The contractor's construction expenses and owner's payments for a construction project are expressed in then-current inflated dollars in the table below. The monthly interest rate required by the bank is 1.3 percent regardless of inflation. Suppose that the work is stopped for two months at the end of month 5 due to a labor strike while the monthly inflation rate is 0.7 percent. Under the terms of the contract between the owner and the contractor, suppose that the owner's payments will be delayed but not adjusted for inflation. Find the cumulative net cash flow with interest due to overdrafting for the following conditions: (a) if there were no labor strike and (b) when there is a strike for two months at the end of month 5. **Instructions** 1)Calculate Net Cash Flow - At 2)Calculate : *Et & Et i/2 3)Calculate The Cumulative Cash Flow Before Payment = Ft with & with out interest 4)Calculate Nt = Nt-1 + It-Et + Pt 5) Calculate: It = Nt i - Eti/2…

Assume the nominal rate of return is 8.63% and the real rate is 4.68%. Find the inflation rate of return using the exact formula.

Suppose the bank give you a loan at 4.46% interest rate but the economy experiences inflation of 6.85%.  What is the real interest rate that the bank earns from you for that given year? Answer this as a percentage and round your answer to two digits after the decimal without the percentage. ex. If you found the inflation rate to be 5.125%, answer 5.13.