What is the real interest rate paid on a credit card loan earning 18 percent nominal interest

Question:

What is the real interest rate paid on a credit card loan earning 18 percent nominal interest per year, if the rate of inflation is
a. zero?
b. 4 percent?
c. 8 percent?
d. 15 percent?
e. 20 percent?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Macroeconomics Principles And Policy

ISBN: 9780324586213

11th Edition

Authors: William J. Baumol, Alan S. Blinder

See More Books

Question Posted: Sep 01, 2012 02:44 AM

See More Questions

On January 26, 2000, the nominal interest rate paid on a three-month federal government Treasury bill was 5.340% in the United States and 5.034% in Canada. At those interest rates, international bond...
What factors cause the real interest rate to change?
The Fisher equation tells us that the real interest rate approximately equals the nominal rate minus the inflation rate. Suppose the inflation rate increases from 3% to 5%. Does the Fisher equation...
What, if any, product or product line modifications will Outback have to make in the country you chose in order to be successful? Are any changes necessary in the design of the restaurants? Explain...
If both the compressor and the turbine of Problem 9.7 are 80% efficient, the cycle efficiency reduces to: (A) 27% (B) 31% (C) 35% (D) 39% Figure 9.38 Fuel Combustor "net Compressor Turbine qout...
Elaines Inflatables earns service revenue by providing party planning services and inflatable playscapes. Elaine's Inflatables is organized as a corporation. During the past month, Elaine's...
Consider forecasting with the $A R(1)$ model. a. Use the forecasting chain rule in equation (8.4) to show \[y_{T+k}-\widehat{y}_{T+k} \approx \varepsilon_{T+k}+\beta_{1}...
Walshs Juice Company produces three products from unprocessed grape juicebottled juice, frozen juice concentrate, and jelly. It purchases grape juice from three vineyards near the Great Lakes. The...
Net income for June\ Withdrawals by Billie Soares in June\ Additional investment by Billie Soares in June\ 115,000\ 25,000\ 50,000 \ a. Prepare a statement of owner's equity for the month ended June...
Ki Technology Co. manufactures DVDs for computer software and entertainment companies. Ki uses job order costing. On April 2, Ki began production of 6,000 DVDs, Job 423, for Paradigm Pictures for...
Country A and Country B have identical population growth rates of 1 percent per annum, and everyone in each country always works 40 hours per week. Labor productivity grows at a rate of 2 percent in...
Suppose you agree to lend money to your friend on the day you both enter college at what you both expect to be a zero real rate of interest. Payment is to be made at graduation, with interest at a...
Concorde aircraft flies at Ma 2.3 at 11-km standard altitude. Estimate the temperature in C at the front stagnation point. At what Mach number would it have a front stagnation point temperature of...
1. Write ARMv8/LEGv8 assembly code for the following assignment statement, written in C programing language. The code should be commented well, and all the assumptions should be clearly stated, note...
A GPS satellite with upper stage is delivered by the second stage of a launch vehicle into a parking orbit with the following initial conditions in the ECI frame: overline r 1 =6900 hat i(km)...
Optical receivers are widely used in Laser pointer, Time of Flight (TOF), and many other applications. Since detected light in sensor induces small current change, we need to change current signal to...
A particle with mass m = 2x 10-12 kg and charge q =-4 nC is released from rest along an equipotential line as shown below. -5 V OV 5 cm 5 cm 5 V I a) What direction will the charge start moving? b)...
The figure below shows the time dependence of velocity. Do the following: 1. Plot the acceleration and displacement with respect to time. Assume, the initial 4 4 v (m/s) + t t 10 18 coordinate is...
We have shown that the Hill cipher succumbs to a known plaintext attack if sufficient plaintext-ciphertext pairs are provided. It is even easier to solve the Hill cipher if a chosen plaintext attack...
Using the information presented in Problem 13.4B, prepare a partial statement of cash flows for the current year, showing the computation of net cash flows from operating activities using the...
Use Pascal's Triangle to write out the expansions of $(a+b)^{6}$ and $(a-b)^{4}$
From the following data, construct an expenditure schedule on a piece of graph paper. Then use the income-expenditure (45° line) diagram to determine the equilibrium level of GDP. Now suppose...
From the following data, construct an expenditure schedule on a piece of graph paper. Then use the income-expenditure (45° line) diagram to determine the equilibrium level of GDP. Compare your...
Suppose that investment spending is always $250, government purchases are $100, net exports are always $50, and consumer spending depends on the price level in the following way: Price Consumer Level...
2. Consider the metal ion complex ferricyanide, [Fe(CN)6], obtained when potassium hexacyanoferrate(III) is dissolved in solution. a) Predict the number and intensity of all its ligand field (d-d)...
16) Chris, Bob, and Matt decide to help each other study during the final exams. Chris's favorite subject is chemistry, Bob loves biology, and Matt knows his math. Each studies his own subject as...
Match the column A with column B and Give Supported explanations. E Charge 1 Charge 2 Distance Apart Force Attracted/Repelled / Neither Trial 1 -4 C 4 cm Trial 2 -4 C -2 C 4 cm Trial 3 -4C -4C 4 cm...

What is the real interest rate paid on a credit card loan earning 18 percent nominal interest

Question:

Step by Step Answer:

a 18 percent b ...View the full answer

Macroeconomics Principles And Policy

Students also viewed these Economics questions