A bank gives 6-month 7.2% interest rate compounded monthly (the interest rate is that the bank...
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A bank gives 6-month 7.2% interest rate compounded monthly (the interest rate is that the bank applies to a client who deposits his money in the bank). This bank provides capital to investors with 22% annual loan interest rate. An investor who receives the loan from this bank wants to invest, expecting 10% annual real profit rate. Annual inflation rate is 14.6%. According to this; a. Determine monthly loan interest rate of the bank (5 P) b. Find annual real profit rate of the bank (5 P) c. Calculate the investor's annual compounded discount (profit) rate. (5 P) d. Calculate the annual real profit rate of the depositor. (5P) A bank gives 6-month 7.2% interest rate compounded monthly (the interest rate is that the bank applies to a client who deposits his money in the bank). This bank provides capital to investors with 22% annual loan interest rate. An investor who receives the loan from this bank wants to invest, expecting 10% annual real profit rate. Annual inflation rate is 14.6%. According to this; a. Determine monthly loan interest rate of the bank (5 P) b. Find annual real profit rate of the bank (5 P) c. Calculate the investor's annual compounded discount (profit) rate. (5 P) d. Calculate the annual real profit rate of the depositor. (5P)
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a To determine the monthly loan interest rate of the bank we need to convert the given annual intere... View the full answer
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