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If Jackson is paid an interest rate of 10 percent on his savings but the inflation rate has risen to 20 percent the purchasing power of his savings is?
If Jackson is earning an interest rate of 10 percent on his savings while the inflation rate is at 20 percent, his purchasing power is decreasing. This is because the inflation rate exceeds the interest rate, resulting in a net loss of value in real terms. Essentially, he is losing 10 percent of the value of his savings each year due to inflation outpacing his interest earnings. Therefore, his savings are effectively becoming less valuable over time.
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If Jackson is paid an interest rate of 10 percent on his savings but the inflation rate has risen to 20 percent the purchasing power of his savings is .?
The purchasing power of Jackson's savings is decreasing. Although he earns a 10 percent interest rate, the 20 percent inflation rate erodes the value of his savings, meaning he can buy less with the same amount of money over time. In real terms, he is losing purchasing power because his interest earnings do not keep pace with inflation. Thus, his effective return is negative.
Julia invested 3000 at an annual interest rate of 5 percent from last year to this year there has been a 4 percent inflation rate after a year the purchasing power of her investment?
rose by 1 percent
What happens if inflation rises by just 1 percent?
The dollar in your pocket is worth .99 of a dollar. also nominal interest=real interest+inflation so nominal interest goes up by 1%
Suppose you place 10000 in a retirement fund that earns a nominal interest rate of 8 percent If you expect inflation to be 5 percent or lower then you are expecting to earn a real interest rate of?
3 percent
The real risk-free rate of interest is 4 percent Inflation is expected to be 2 percent this year and 4 percent during the next 2 years Assume that the maturity risk premium is zero What is the yield?
The answers are 7%, 7.33%.
If Jackson is paid an interest rate of 10 percent on his savings but the inflation rate has risen to 20 percent the purchasing power of his savings is .?
The purchasing power of Jackson's savings is decreasing. Although he earns a 10 percent interest rate, the 20 percent inflation rate erodes the value of his savings, meaning he can buy less with the same amount of money over time. In real terms, he is losing purchasing power because his interest earnings do not keep pace with inflation. Thus, his effective return is negative.
Julia invested 3000 at an annual interest rate of 5 percent from last year to this year there has been a 4 percent inflation rate after a year the purchasing power of her investment?
rose by 1 percent
Julia invested 3000 at an annual interest rate of 5 percent. From last year to this year there has been a 4 percent inflation rate. After a year the purchasing power of her investment?
rose by 1 percent
Julia invested 3000 at an annual interest rate of 5 percent. From last year to this year there has been a 4 percent inflation rate. After a year the purchasing power of her investment .?
rose by 1 percent
What happens if inflation rises by just 1 percent?
The dollar in your pocket is worth .99 of a dollar. also nominal interest=real interest+inflation so nominal interest goes up by 1%
How much will 180000 dollars be in 20 years with 9 percent interest and 4 percent inflation rate?
477,567
What would you expect the nominal rate of interest to be if the real is 4 percent and the expected inflation rate is 7 percent?
5
Suppose you place 10000 in a retirement fund that earns a nominal interest rate of 8 percent If you expect inflation to be 5 percent or lower then you are expecting to earn a real interest rate of?
3 percent
If a person has money invested at 9 percent and the rate of inflation is 5 percent how much return are they actually making on their investment?
To find the real return on an investment, subtract the inflation rate from the nominal interest rate. In this case, if the investment earns 9 percent and inflation is at 5 percent, the real return is 9 percent - 5 percent = 4 percent. Therefore, the investor is actually making a return of 4 percent on their investment after accounting for inflation.
The annual nominal rate of interest on a bank certificate of deposit is 12 percent what would be the effect of an inflation rate of 13 percent?
The 12 percent nominal interest means that your money will increase in value by 12% in a year's time in NOMINAL terms.However, the inflation rate of 13 percent says that the cost of goods will increase faster than the value of your deposit.Hence the REAL effect is that the value of your money will fall by 1 percent.
What is pakistan's current inflation rate?
The inflation rate in Pakistan was last reported at 12 percent in August of 2011. From 2003 until 2010, the average inflation rate in Pakistan was 10.15 percent reaching an historical high of 25.33 percent in August of 2008 and a record low of 1.41 percent in July of 2003. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes: Pakistan Inflation Rate chart, historical data and news.
The real risk-free rate of interest is 4 percent Inflation is expected to be 2 percent this year and 4 percent during the next 2 years Assume that the maturity risk premium is zero What is the yield?
The answers are 7%, 7.33%.
