Suppose that your bank pays 4% interest per year on your savings account. Each $100 in the banks grows to $104 over a one-year period. If prices increase by 3% per year, how much do you really gain by keeping $100 in the bank for a year.

Q: rates affect business? Consumers?

A: Market interest rate plays extremely essential part in the business and customer spending in light…

Q: State the sources of aggregate domestic savings.

A: Aggregate domestic savings are the difference between  GDP(Gross Domestic Product) and aggregate…

Q: Is it possible for a one-year coupon bond to have a negative nominal interest rate? Explain, how?

A: Yes, it is possible for a one-year coupon bond to have a negative nominal interest rate as long as…

Q: Suppose that on January 1, 2022, the price of a one-year Treasury bill with a face value of…

A: Given: The face value is = $1,000 The price value is = $926.78 The real interest rate turns out to…

Q: People should buy bonds when they think that interest rates are as high as they will go.

A: A bond is a financial instrument that allows an issuer to raise capital by borrowing money from…

Q: If government spending were increased, what would occur to interest rates

A: Government spending refers to the money spent by the government on things like health care,…

Q: If you bought one Bitcoin at a total cost of $50,000 at the beginning of year t and sold it by…

A: Buying price = $50000Selling price = $ 87500   real rate of return is the percentage of return on…

Q: True or false, with explanation Suppose the bank deposit has 30% annual interest rate. It implies…

A: When talking about deposit interest rate, it is the annual rate of return for the people when they…

Q: Would a dollar tomorrow be worth more to you today when the interest rate is 20% or 10%?

A: Given the interest rates are 20% and 10%.

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: Is this possible or not that the rate of interest fall to zero? 300 words

A: The interest rate refers to the payment rate that is charged by a lender on a borrower for using the…

Q: Short term savings and loans are part of what

A: Financial Market generally in an economy is characterized as – Money Market and Capital Market…

Q: If the interest rate is 8%, how much households and firms will want to borrow?

A: The households and firms that want to borrow imply the demand for funds in the market. Thus we will…

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: If you go to an Islamic bank and ask for financing for following purposes, which financial product…

A: Risk refers to the uncertainty associated with an event's outcome. In the finance industry, it…

Q: As a percentage, $9.00 is equal to _____ of $20.00.?

A: In this case, the value of $9 which is equal to what percentage of $20 has to be calculated. This…

Q: would bonds still be a good option for investment if interest rates are negative?

A: Negative-yielding bonds are monetary instruments that cause buyers to lose cash.  They are typically…

Q: Write the two types of interest rates used in equivalence calculation rates?

A: The amount of interest received for an investment at the end of a year need to calculate its…

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: What are Nominal Interest Rates?

A: Inflation refers to a continuous increase in the price of any commodity and service in the economy…

Q: What is the value of Private Savings? What is the value of Public Savings? What is the value of…

A: The national savings are the sum of private savings and public savings of the country.

Q: Calculate the net present value in year 0, of the next series of payments. Suppose that i = 10% per…

A: The difference between the present worth of inflows and present worth of outflows is said to be net…

Q: How do people typically respond to higher real interest rates? by saving less by paying more taxes…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the financial market, what does it do in terms of saving investment and interest rates

A: A market is a place where the exchange of goods and services takes place between the consumers and…

Q: “An increase in a country's population is likely to raise the real interest rate.

A: The IS curve represents the equilibrium in the goods market. The equilibrium in goods market is…

Q: If mortgage rates fell to 0 percent ("free money"), why might consumers still hesitate to borrow…

A: In general, the term mortgage rates refer to the interest rate charged by the financial institution…

Q: Discuss five ways which the country can do to increase its savings rate.

A: The savings is defined as the amount of income that is not paid in taxes to the government or not…

Q: Question No: 02 [Marks: 10] If the State Bank started printing large quantities of Pakistani Rupees…

A: It will increase.

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: What do you think accounts for the wide range of savings rates in different countries?

A: Saving rate- It is the ratio between savings of household and (unadjusted) gross disposable income.

Q: What is Tesla Inc. in 2018 all about?

A: Introduction Elon Musk, Tesla's Chairman and CEO, tweeted on August 7, 2018, that he was…

Q: Many countries have policies that limit how much interest a moneylender can charge on a loan. Do…

A: Interest rate is considered as the borrowing cost because the person who is borrowing money has to…

Q: what is high interest rates?

A: In an economy, interest rate is one of the economic term used at the marketplace when people make an…

Q: Suppose that in Year 1 an economy produces 100 golf balls that sell for $3 each and 75 pizzas that…

A: Value of the money shows how much the money value has increased/decreased. So we divide the current…

Q: What is the relationship between interest rates and business investment?

A: To determine the relationship between interest rates and investments.

Q: Suppose that you deposit $411 at an interest rate of i = 3% Using the formula for future value, how…

A: Time vale of money tells us how money grows with time . This is why today's money is  not worth in…

Q: Consider a bond that promises to pay $100 in one year. If the interest rate is 6%, the price of the…

A: Given, future price = $100 Interest rate = 6% / 0.06 The formula to measure today's bond price is…

Q: A businessman borrows money of $ 200,000 from the bank to be repaid in three years by a single…

A: Here, it is given that a specific amount of money is borrowed for three years at 12% interest rate.…

Q: At 4% interest rate, how much should you invest today to be able to withdraw ₱ 4,325annually for 5…

A: The conception of present value asserts that a add of cash these days is price quite a add of cash…

Q: What do you expect will happen to investment demand in this country?

A: The markets of a nation are considered to be the integral part of the growth of the nation. The…

Q: What is the relationship between nominal and effective interest rates?

A: The interest rates refer to the rate at which the loans are given by the banks, or other lending…