Given the anticipated rate of inflation (i) of 2.13% and the real rate of interest (R) of 3.1%, find the nominal rate of interest (r). Mathematical procedure needed

Q: The expected real interest rate approximately equals Select one: O A. the yield to maturity on a…

A: In interest rate there is one component related to inflation and the other part is related to the…

Q: What is Simple Annuity? (payment interval, and interest period, time of payment, duration)

A: Given Simple annuity Payment interval Interest period Time of payment  Duration…

Q: What is equivalent annual annuity (EAA) method?

A: Equivalent annual annuity (EAA): Equivalent annual annuity measures the annual payments a scheme…

Q: The present value of a lump sum future amount: O A. increases as the interest rate decreases. O B.…

A: The present value is defined as the discounted amount of the expected future value. The current…

Q: hOW DO YOU CALCULATE MARR in real terms? (Adjusted for inflation)

A: Minimum Acceptable Rate of Return (MARR) is made to ascertain the economic attractiveness of the…

Q: Define effective annual rate (EAR) with examples. Differentiate between annuity cash flows and mixed…

A: Nominal interest rate (annual interest rate) is the annual rate without effect of compounding.

Q: Which of the following best describes the constant-growth dividend discount model? a. It is the…

A: Constant-Growth Dividend Discount Model: Growth that is unabated The Dividend Discount Model, often…

Q: direct and indirect relationships between balance of payment and inflation rate.

A:

Q: What is the rela1ionship between Annual  Percentage Rate and the interest period?

A: Answer: Annual percentage rate represents the interest rate which also takes additional payments…

Q: The interest that is charged on the principal and the interest from previous years is called: O a.…

A: Introduction: Interest amount: Amount charged on principal amount called as interest. Interest is…

Q: Interest rate that include an inflation premium are referred to as

A: In the world of finance you will often come across the term nominal rate and real rate.

Q: A forward rate is a borrowing/lending rate for a loan to be made at some future date.   Select…

A:

Q: You should find that your answer in part c) is larger than your answer in part b). By considering…

A: This is general practice to be followed universally that if a person choose to pay any loan amount…

Q: Which of the following describes how to calculate abond’s issue price?Face Value Interest Paymentsa.…

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: The nominal rate equals the real rate plus the inflation rate. True False

A: Nominal interest rate sometimes is also called as stated interest rate.

Q: The Interest earned over a specified period of time is expressed a percentage of the original amount…

A: Rate of return is the total incentive earned on the amount invested expressed in percetage.

Q: 1)What is '''effective annual interest rate"? 2) Explain it by numerical examples

A: There are two types of interest rate Nominal Interest Rate and Effective Interest Rate The effective…

Q: Fill in the blank with an appropriate​ word, phrase, or symbol.   When using the simple interest​…

A: A person is depositing or putting some money as an investment for the purpose of gaining returns.…

Q: The discount rate is the combination of what two types of discounting?   a. exponential and linear…

A: Discount rates are used for discounting the future cash flows. It helps in determining the time…

Q: Notes Receivable with an Effective and Nominal Rate should report interest expense as?   Effective…

A: Solution: Notes Receivable with an Effective and Nominal Rate should report interest expense as…

Q: Post an interest rate calculation question for your peers that incorporates any of the following…

A: As asked in the question to post a question considering any of the interest rates, so we will take…

Q: Which of the following cannot be calculated? Select one: a. the interest rate on perpetuity given…

A: Perpetuity is referred to as an annuity, which does not have an end or the stream of the cash…

Q: Q : Write shot note while differentiating the following. i): simple interest VS compound interest.…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: (Click on the following icon e in order to copy its contents into a spreadsheet.) Approximate True…

A: Approximate Real Rate = Nominal Rate - Inflation Rate True Real Rate = [ (1+Nominal rate) /…

Q: is there a way of computation for both interest (simple and compound) that you could paid the total…

A: Simple interest is calculated on the loan or deposit's principal amount, whereas compound interest…

Q: Assume that the variables I, N, and PV represent the interest rate, investment or deposit period,…

A: Compound interest formula: Future value = Present value *(1+rate)^years. Answer: FV = PV x (1 + I)NN

Q: You should find that your answer in part c) is larger than your answer in part b). By considering…

A: We know that if borrower choose to pay in longer period the installment amount is lower but the…

Q: O discounting factor. O number of periods. O compounding factor. O interest rate. cash flow is…

A: Present value is the equivalent value of the future cash flow based on the time value of money and…

Q: What is the primary difference between an ordinary annuity and an annuity due? Group of answer…

A: The primary difference between an ordinary annuity and an annuity due lies in the timing of the…

Q: Monthly interest rate?

A: Monthly interest rate is the interest charged on the unpaid balance of credit card.

Q: Define the following and provide respective examples; Simple interest  Compound interest Annual…

A: Simple Interest: Simple interest is a type of interest calculation where the interest amount is…

Q: The real rate of return is related to O The risk-free rate The risk-free and the inflation rate The…

A: Real rate of returnAn annual profit percentage that is earned on the investment, being adjusted for…

Q: Summarize the varying effective interest rates per payment period under compounding frequencies?

A: The varying effective rate per payment period in case of compounding frequencies as under: When…

Q: Whenever payment and compounding periods differ from each other, it is recommended to compute the…

A: The effective annual interest rate is the real return for a bank account or other interest paid…

Q: Select all of the time value of money factors that are known in a NPV assessment O Present value of…

A: npv : IT IS THE DIFFERENCE BETWEEN PRESENT VALUE OF CASH INFLOW AND PRESENT VALUE OF CASHOUTFLOW.

Q: Briefly explain how each of the factors below influence interest rates: A.   Inflation    B.…

A: Inflation refers to the general increase in the price level of goods and services in an economy over…

Q: What is the formula used in annuity due if your looking for the compounded interest rate with given…

A: Present Value of an Annuity is used when a business wants to know how much amount it should pay for…

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”.