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If the interest rate was 8 percent, people would likely reduce their borrowing due to higher costs associated with loans, making mortgages, car loans, and credit cards more expensive. This could lead to decreased consumer spending and investment, as individuals and businesses may prioritize saving over spending. Conversely, savers might benefit from higher returns on their deposits, encouraging more saving behavior. Overall, the economy might experience slower growth as a result of reduced consumption.
What else can I help you with?
If the money rate of interest is 10 percent and the real rate of interest is 7 percent the inflationary premium is?
The inflationary premium can be calculated by subtracting the real rate of interest from the nominal interest rate. In this case, if the money rate of interest is 10 percent and the real rate is 7 percent, the inflationary premium is 10% - 7% = 3%. Therefore, the inflationary premium is 3 percent.
The impact a 5 percent increase in interest rates would have on people?
The impact is two fold - one for people who avail loans and the other for people who make deposits. For loan customers - increased interest rate means higher monthly payments on loan EMI For Deposit Customers - increased interest rate means higher earning on their deposits with the bank.
If two banks offer risk-free interest rates on both savings and loans but one is 5.5 percent and the other is 6 percent what arbitrage opportunity is available?
Arbitrage OpportunityArbitrage opportunity is any situation in which it is possible to make a profit without taking any risk or making any investment. The arbitrage opportunity that is available is to borrow from the bank with 5.5 percent interest and deposit it in the one with 6 percent interest. And this would happen: While the bank with 5.5 interest would experience a demand for loans, the bank with 6 percent interest would experience a surge in deposits. As a result, the interest rate at the first bank would increase while the interest rate at the second bank would decrease.
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 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.
What would the daily interest rate on an annual rate of 18.4 percent?
0.050410958904109589041095890410959%
What is an example of an inexpensive loan and a medium price loan and a expensive loan?
An inexpensive loan is one with a 0.12 percent interest rate. A medium price loan would be about a 6.5 percent interest rate. Lastly, an expensive loan would be one with an interest rate of 15 percent or more.
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
How much interest would you receive for 2000 at 1 percent interest rate for 1 year?
1 percent of 2,000 is 20 .
What is 200 at an annual interest rate of 5?
At an interest rate of 5 percent, $200 would earn $10 in one year.
How much interest would I earn in one year on 100000 with a 1.75 percent interest rate?
You would earn 1750.
Would a dollar tomorrow be worth more to you today when the interest rate is 20 percent or when it is 10 percent?
10 percent.
Does an increase of 4 percent in the interest rate result in a 4 percent increase in the total interest paid?
Not usually. A "4 percent increase in the interest rate" usually means that there is some reference interest rate of x percent that is increased to 4 + x percent. This means that the interest paid increases from x percent of the principal to 4 + x percent of the principal. Therefore, the interest paid increases by 100 (4/x) %. For example, if a recent Federal funds rate of 1 % in the United States were to be increased by 4 %, the interest paid on any given amount of principal would increase by 400 %!
What would the daily interest be on 36 million pounds when the banks interest rate is 3.15 percent AER?
310,685
How do you find interest rate?
To find interest rate you multiply the price by the time by the percent
What is the monthly interest rate if the annual interest rate is 18 percent?
1.5% monthly
What was the interest rate in 1968?
As of today, there was no one set interest rate in 1968. On a CD, the interest rate averaged between 5.53 percent and 6.39 percent in 1968. The 2013 rates on CDs are only 1.0 - 1.5 percent.
