Answered: What are the factors affecting the…

What are the factors affecting the amount of money paid for the use of borrowed capital or the income produced by the loaned money?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 6SCQ: What is the total amount of interest from a 5,000 loan after three years with a simple interest rate...

See similar textbooks

Related questions

Q: uppose the government changes the tax code, allowing individuals to reduce their taxable income if…

A: According to the neoclassical theory of loanable fund, the interest rates are determined at point…

Q: The economy of Dream Island, which is isolated from the rest of the world, has the supply of…

A: Demand curve for the loanable fund shows the level of demand for loan at different interest rate.…

Q: 1. What will happen to interest rate, price of bonds and quantity of bonds if interest rates are…

A: Answer: There is an inverse relationship between interest rate and the price of bonds. If the…

Q: What impact did COVID-19 have on loaning insttiutions such as banks and private loaning companies.…

A: The COVID-19 has caused a widespread concern and economic trouble for consumers, businesses and…

Q: Suppose the government borrows $20 million more next year than this year. a. Draw and fully label a…

A: PLEASE FIND THE ANSWER BELOW.

Q: For questions 3-4, consider the three sequences of incomes below ( P, Q, and R). Each sequence…

A: In economics, present value refers to the current value of a future stream of cash flows. Future…

Q: What is the effect of continuous increase in savings on loanable funds market?

A: A market interest rate theory known as the loanable funds doctrine. The interest rate is set by the…

Q: define and explain the importance of lender of last resort

A: Answer: Definition: Lender of last resort: it is the institution (generally central bank of a…

Q: a. Suppose there are two types of investment in the economy: business fixed investment and…

A: The total amount of money that individuals and institutions in an economy have agreed to save and…

Q: What is market for loanable funds? Use the analysis of market for loanable fund to analyse the…

A: The market for loanable funds is a marketplace where funds are being lent and borrowed.

Q: Chairman Latrobe, the Supreme Leader of Rolling Rock decided to increase the personal tax…

A: Note: Since you have posted multiple independent questions in the same request, we will solve the…

Q: Question 3 (2 marks): The Cash Grab Credit Card Company charges a nominal 28 percent interest on…

A: Answer: Given that: The cash Grab Credit card Company charges a nominal 28 percent interest on…

Q: What factors make up the total demand for loanable funds? The total supply of loanable funds. Please…

A: As economies emerged, goods and services were produced that required machinery and labour. With time…

Q: ou have just won 10 million dollar in the lottery which promises to pay you 1 million dollar every…

A: Given the information: The winning amount of the lottery = 10 million dollar Each year payment = 1…

Q: Define each of the following loan terms, and explain how they are related to one another: the prime…

A: Loan: It refers to the money that people takes from banks or from friends and relatives. The more…

Q: Suppose, the government of Australia incurs a budget deficit of $50 billion due to increased…

A: A budget deficit tends to occur when the expenses tend to exceed revenue and it indicates the…

Q: Retired persons often have much of their wealth placedin savings accounts and other interest-bearing…

A: Real interest rate refers to the interest rate that subtracts the inflation rate from the nominal…

Q: You decide to lend your sister, who has never defaulted on a loan (ie. ρd =0), $1000 for one year.…

A: At the end of the year she gets $1050 (which includes the loan). Loan given to sister was of $1000.…

Q: First Call, Inc., a smartphone company, plans to build a factory-one that costs $14 million if the…

A: Market for loanable funds determines equilibrium interest rate where demand for loanable funds is…

Q: college student borrowed $46,000 to pay for tuition, room, and board. Some of the money was borrowed…

A: * SOLUTION :-

Q: What could cause a drop in interest rates? the supply curve for loanable funds shifting left, or the…

A: In an economy, the changes in interest rate depends upon the demand or supply of loanable funds in…

Q: Suppose that you earn $320 in year 1 and will eam $720 in year 2. If you borrow money against your…

A: Hi there , as per our guidelines we are only allowed to solve 1 question with maximum 3 sub parts .…

Q: Recently, the economies of North Korea and Norway have begun to grow very rapidly. This increases…

A: The market equilibrium interest rate is decided by the supply of loanable fund and demand for…

Q: Suppose the government of Italy offered a tax credit for firms that help to restore and preserve…

Q: The premier rate, the rate on corporate paper, the simple interest rate on a bank loan requiring…

A: Introductions, Loan:- It alludes to the cash that people borrow from friends, family, or banks.The…

Q: QUESTION 1 Muhammad takes out a loan of $ 4,324, at 8% simple interest, for 9 years. How much will…

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

Q: Given demand and supply for loanable fund Market at given time period in the table below Real…

A: Given Interest rate Quantity of loanable fund demanded (billion $) Quantity of loanable fund…

Q: difference of the demand of financial services

A: Financial services include a wide range of economic activities like investing, managing insurance,…

Q: Scenario 1: The economy enters a recession driving down the demand for homes nationwide. 1. What is…

A: Recession:- Recession can be defined as a period of economic contraction, when economic activity in…

Q: If a lender makes a simple loan of $400 for 3 years and charges 5%, then the amount that the lender…

A: 1) Principal=P=$400years=n=3interest=r=5%Interest after 3 years=P×n×rInterest after 3…

Q: 15.) What causes the basic changes to overall supply and demand for money and loanable funds?

A: The loanable funds market is basically a kind of place where borrowing and lending take place. The…

Q: Compute the following: The present value of $25,000 each year for 4 years at a 7 percent interest…

A: Present value: Present value can be calculated by using the following formula:

Q: Recently, the economies of North Korea and Norway have begun to grow very rapidly. This increases…

A: Loanable fund theory states that in loanable fund market demand for loanable fund and supply…

Q: If and when the demand of loanable funds shifts to the left:

A: The market for Loanable Funds defines how the borrowing and lending activities take place in the…

Q: Suppose the government borrows $20 million more next year than this year. a. Draw and fully label a…

A: Answer: If the government borrows $20 million more next year it means the government revenue falls…

Q: y due an

A: An annuity is a contract entered between a person and an insurance company in which either series of…

Q: What happens to the quantity of loanable funds supplied when the interest rate rises? Explain why…

A: The market that depicts the behavior of all potential borrowers and potential savers that exist in…

Q: Suppose that you eam $250 in year 1 and will eam $448 in year 2. If you borrow mòney against your…

A: Given information: Earning in Year 1 = $250Earning in Year 2 = $448 If money is borrowed against…

Q: 1. Draw a graph when government run a change in the tax that might increase private saving. How…

A: Investment and savings are directly affected by the rate of interest.

Q: 2. Greg wants to have $50 000 in five years. He has $20 000 today to invest. The bank is offering…

A: 2.Given that Greg wants to have $50,000 in five years. He has $20,000 today to invest. Time = 5…

Q: Lista the factors that affect the supply side of the loanable funds market. which factors shifts the…

A: The market in which borrowers (demanders of funds) and lenders (suppliers of funds) make…

Q: What makes up the supply curve in the loanable funds market? Why does this curve have a positive…

A: The supply curve is a graphical portrayal of the connection between the expense of goods and…

Q: what is the present value of a loan when a monthly payment of ₱3,250 is needed to extinguish for 3.5…

A: Present Value gives the value of a series of cash flows when it has been discounted with the current…

Q: Joyce buys a television set from a merchant who asks P 18,750 at the end of 60 days (cash in 60…

A: Given information: Future value: P18,750 Time period: 0.167~ 2 months (approx) Interest rate: 8%…

Question

What are the factors affecting the amount of money paid for the use of borrowed capital or the income produced
by the loaned money?

Discuss and illustrate the different types of annuity.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is the total amount of interest from a 5,000 loan after three years with a simple interest rate of 6?
A mortgage 105m is a loan that a person makes to purchase a house. Table 19.11 provides a list of the mortgage interest rate for several different years and the rate of inflation for each of those years. In which years would it have been better to be a person borrowing money from a bank to buy a home? In which years would it have been better to be a bank lending money?
How is buying a house to live in a type of financial investment?
Calculate the equity each of these people has in his or her home: Fred just bought a house for 200,000 by putting 10 as a down payment and borrowing the rest from the bank. Freda bought a house for 150,000 in cash, but if she were to sell it now, it would sell for 250,000. Frank bought a house for 100,000. He put 20 down and borrowed the rest from the bank. However, the value of the house has now increased to 160,000 and he has paid off 20,000 of the bank loan.
What are the factors affecting the amount of money paid for the use of borrowed capital or the income produced by the loaned money
Discuss the difference between ordinary annuity and annuity due and how it affects the value of an investment
Explain Borrowed-Funds Concept?
Describe the Borrowed-Funds Concept?
The Loanable Funds Theory suggests that the market interest rate is determined by the factors that control supply of and demand for loanable funds. Discuss the factors that affect interest rates.
ASAP. Use 2 decimal places for the final answer 5. If I loaned an amount of P50,000.00 with an interest rate of 11.98 % compounded monthly for 5 years. What is the real interest rate or the effective interest rate in percent?
What factors make up the total demand for loanable funds? The total supply of loanable funds. Please list and define each of these demand and supply factors in the Loanable Funds Theory of Interest.
How much money will you have in seven yearsif you deposit $7,000 in the bank at 8.5% interestcompounded daily?