Frank is lending $1,000 to Sarah for two years. Frank and Sarah agree that Frank should earn a 1 percent real return per year. Instructions: Enter your responses as as whole numbers. a.The CPI (times 100) is 100 at the time that Frank makes the loan. It is expected to be 117 in one year and 136.9 in two years. What nominal rate of interest should Frank charge Sarah? The nominal rate of interest charged should be %. b. Suppose Frank and Sarah are unsure what the CPI will be in two years. How should Frank index Sarah's annual repayments to ensure that he gets an annual 1 percent real rate of return. Frank should charge Sarah % the inflation rate.

Answers

Answer 1

Answer:

a) 18%

b) if Frank and Sarah are unsure about future inflation rate, they can agree on a variable interest rate. For e.g. this year the inflation rate was 17%, so the interest charged is 18%. If next year the interest rate is 15%, then the interest charged should be 16%.

the formula that they can use to calculate inflation rate is:

for calculating the first year's inflation rate = [(CPI₁ - CPI₀) / CPI₀] x 100for calculating the second year's inflation rate = [(CPI₂ - CPI₁) / CPI₁] x 100

Explanation:

principal $1,000

real return = 1%, that means that Frank will earn inflation rate + 1%

since the CPI increases by 17% every year, then Frank must charge 17% + 1% = 18%


Related Questions

how has smart phones products been modified over time particularly modifications that made it more useful to business in general

Answers

Answer:

The rise of smartphones, tablets, and phablets has led to so many shifts from little tweaks (such as the need for bigger, clearer fonts) to huge strategic moves (the current payment wars) that just keeping track of it all can feel overwhelming. Trying to draw the right strategic lessons is even more daunting.

To help, we’ve highlighted seven key ways mobile devices have transformed e-commerce. This list, of course, is no means an exhaustive rundown of every change in the space. Rather, it’s simply an overview of some of the shifts we believe matter most.

Explanation:

bro of if I'm r8 pls make me braniest and follow me.

A business owner who takes risk describes which of the following?
a. Entrepreneur
b. Status quo
C.Inventor
d. Entrepreneurship

Answers

Answer:

A. sorry if thats wrong!

It’s definitely A. Entrepreneur

FarCry Industries, a maker of telecommunications equipment, has 2 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10,000 bonds. Suppose the common shares are selling for $27 per share, the preferred shares are selling for $14.50 per share, and the bonds are selling for 98 percent of par.

What would be the weight used for equity in the computation of FarCry?

Answers

Answer:

18.52%

Explanation:

Calculation for the what would be the equity weight

Using this formula

Equity weight =E÷E+P+D

Let plug in the formula

Equity weight=$2,000,000×$27÷$2,000,000×$27+$1,000,000×$14.50+$10,000×.98×$1,000

Equity weight=$14,500,000÷$78,300,000

Equity weight=.1852×100

Equity weight=18.52%

Therefore what would be the equity weight is 18.52%

Select the correct answer from each drop-down menu.
Managers use the decision support system to support business and organizational decision making. What are two examples where companies
make use of this system?
Decision support systems help managers use (filtered data, structured data, raw data)
to identify problems and find solutions to business-related problems.
The (financial decision, financial planning, financial management)
system is an example of this system.

Answers

Answer:

1st one: Raw data

2nd one: Financial planning

Explanation:

I saw another question where the OP gave the answer saying that they posted it for people so that they could answer it, and the answer was indeed correct. Thanks BanditCrusher06

Question: https://brainly.com/question/18519269

Decision support systems help managers use raw data to identify problems and find solutions to business-related problems. The financial planning system is an example of this system. Thus, option C and B is correct.

What is decision-making?

Determining a decision, acquiring data, and weighing alternative approaches are all steps throughout the decision-making method. One can make a decision based on the alternatives that are available to them and choose which one will be the most feasible. 

Managers to using raw data which means the unfiltered filter data to detect the problem and discover the solution by using the decision-making process as these data or not being adjusted or being filtered out which would give them the best result

One illustration of this system is financial planning, in which the manager basically allow different finance or different amount to the various department based on their requirements. Therefore, option C and B is the correct option.

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a entry to a liability account decreases the account balance

Answers

Answer:

Asset accounts. A debit increases the balance and a credit decreases the balance. Liability accounts. A debit decreases the balance and a credit increases the balance.

Explanation:

Who are the best candidates for members of the BPA? Check all that apply.

Allan wants to provide education for young people.
Brenna wants to have a career in computer-related work.
Philomena wants to have a career in agriculture.
Cody wants to manage a company’s office.

Answers

Answer: Brenna wants to have a career in computer-related work.

Cody wants to manage a company’s office

Explanation: just did it.

Answer:

B- brenna

D- Cody

Explanation:

Just did the quiz

The law of demand states that a price and quantity demanded do not affect each other. b as price increases, quantity demanded increases. c as price increases, quantity demanded decreases. d supply, price and quantity demanded do not affect each other.

Answers

Answer:

c as price increases, quantity demanded decreases.

Explanation:

The law of demand states that the higher the price of an item, the lower the quantity demanded of that good. While the lower the price, the higher the quantity demanded.

This shows an inverse relationship. As the price of a commodity increases from a former price to a new price, the consumers of that commodity would purchase less of it. But if the reverse is the case, that is price is lowered, consumers would purchase more quantity of the commodity.

How is being good at communicating and collaborating and problem-solving important to having an entrepreneurial mindset

Answers

Answer:

Communicating and collaborating is the ability to clearly express ideas to an intended audience, including persuading others to work towards a common goal. Critical thinking is the key to a successful business, and being willing to find creative solutions even if it might mean more work will help your business greatly in the long run. In order to be creative and promote your business you have to know how to put yourself out there, and be social

Which student organization helps students with career development by having them become interns to sponsor conferences
A. BPA
B. HOSA
C. FCCLA
D. Skills USA

Answers

Answer:

BPA

Explanation:

I just took the test and that is the answer.

BPA is the student organization helps students with career development by having them become interns to sponsor conference. Hence, option A is correct.

What is meant by BPA in student organization?

BPA Worldwide, a company established in the US, provides unbiased, impartial analyses of audience claims made by business-to-business and consumer media and events.

To aid in the development of cross-cultural professionals, Business Professionals of America's purpose is to advance leadership, civic involvement, academic excellence, and technological competence.

The four points of the BPA shield represent poise, ambition, leadership, and sociability. The shield itself stands for respect, honour, and the importance of trade to America. Citizenship, competence, dependability, devotion, and education are represented by the stripes.

Thus, option A is correct.

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Wants can also be considered which of the following?

Answers

Answer:

What are the answer choices

A traditional store selling products

Answers

Confused? What is the problem at hand?

Answer:

Bricks and mortar is your answer.

Explanation:

Explain why during a recession the level of consumer spending will fall. [6] - economics

Answers

Answer:

During recessions, of course, consumers set stricter priorities and reduce their spending. As sales start to drop, businesses typically cut costs, reduce prices, and postpone new investments.

Which of the following are signs of a person being in credit distress?
A. Writing a check to make debt repayment
B. Making all debt repayments in full
C. Only making minimum payments on credit cards each month
D. Paying-off an automobile loan 12 months early

Answers

Answer:

C. Only making minimum payments on credit cards each month

Explanation:

Credit distress is a financial status where an individual or a firm cannot meet its obligations in time. The business or the individual cannot generate sufficient resources to pay their debts as they become due. To a business, high fixed costs, economic downturns, and illiquid assets cause credit distress.

Poor budgeting, unnecessary debt load, poor financial decisions lead to credit distress among individuals. Other signs of credit distress include living or over-relying on overdrafts, problem paying bills on time, and getting reminder collection calls and past-due notices.

Ian is interested in purchasing bonds, but he is looking for bonds that aren’t related to the government. Which type of bonds would you suggest he purchase?

treasury bonds

municipal bonds

corporate bonds

general obligation bonds

Answers

Answer:

The principal of a Brady bond is backed by U.S. Treasury bonds that are deposited with the Federal ... A corporate bond has a 12% nominal yield. ... General Obligation Bond's credit risk:.

Explanation:

try it

Treasury bonds are the  type of bonds would you suggest the purchase. Hence, option A is correct.

What is Treasury bonds?

Until they complete, Treasury bonds provide a fixed rate of interest every six months. They are given out for 20 or 30 year contracts. Treasury Direct is where a person may purchase Treasury bonds from a financial institute. Additionally, a person can purchase them from a bank or broker.

Treasury bonds are among the safest assets a person can buy because they are supported by the full faith and credit of the United States Government. They often don't provide a very high return because there is so little chance that you will lose money.

Thus, option A is correct.

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When a hotel does not fill a room and therefore the sale of that room on that day is lost forever, that refers to...
a.) product services-mix length
b.) seasonability
c.) perishability
d.) productservices-mix width
e.) tangible

Answers

Answer:

c.) perishability

Explanation:

The term perishability is used in marketing to describe the inability to keep or store services for sale in the future. Services are intangible and by nature. Once a service has been performed, it is deemed to have been consumed and cannot be returned or resold.

Once a service is offered, and the customer does take up the offer, it cannot be stored or kept for sale at a later date. If a hotel room is not booked for a particular night, the room does not generate any revenues for that night.  The hotel cannot store the room services for that night and offer them to customers any other time. The inability to preserve a service for sale at a later date is what marketers refer to as perishability.

(Economics)How is the equilibrium price found using a supply and demand graph

Answers

On a graph, the point where the supply curve (S) and the demand curve (D) intersect is the equilibrium. ... At any other price, the quantity demanded does not equal the quantity supplied, so the market is not in equilibrium at that price.

Answer:

It is found where the supply curve meets the demand curve

Explanation:

just took the test

Following a systematic approach is useful during which step of the seven-step decision-making model?


gathering information and data

identifying the decision to be made

identifying options

developing a plan of action

Answers

Answer:

developing a plan of action

Explanation:

The main function of a high-risk investment is to:
A. make sure that an investment does not lose money.
B. make a variety of investments to balance risk and reward.
C. protect an investment from government fees and taxes.
D. quickly earn as much return on investment as possible.

Answers

D because the reason to take a risky investment is because you need a lot of money quickly

The main function of a high-risk investment is that one quickly earn as much return on investment as possible.

The advantages of high risk investments are:

Investors can earn huge returns in a very short period of time Investor are able to purchase and sell the securities with ease.Investors can earn capital gains as well as dividends on their investments.

The reason for investment is for profit or returns. it often involves risk.

Conclusively, Every investor invests with a specific objective at heart, and most investment has its own unique set of benefits and risks.

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Mr. Gupta is also considering giving his employees a raise that would increase total salaries by $35,000.00 per year. What effect would this raise have on Mr. Gupta’s income tax?

Answers

I think the taxes would decrease but increase for the company

Which economic indicators most strongly suggest that an economy is
experiencing the expansion phase of the business cycle?
A. Unemployment rates are rising while GDP is falling.
O B. Unemployment rates are declining while GDP is rising.
O C. Both GDP and unemployment rates are rising.
D. Both GDP and unemployment rates are falling.

Answers

Answer:

A. Unemployment rates are rising while gdp is falling

Explanation:

Unemployment rates are rising while GDP is falling is the economic indicators most strongly suggest that an economy is experiencing the expansion phase of the business cycle. Hence, option A is correct.

What is Unemployment rates?

Unemployment rates is the number of people who are unemployed in comparison of the total employment in the workforce. Unemployment rates directly affects the economic growth of the country.

If the Unemployment rates are more in  the country than it is considered the poor economy of the country.

Thus, option A is correct.

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Establishing an online professional network is an important tool for locating career opportunities in the twenty-first century.


False

True

Answers

Answer:

I say your answer option is true. I'm so sorry if my answer ends up being wrong. I tired my best

Answer:TRUE

Explanation:

Hospitality is a business strategy.
True or false

Answers

Answer:true

Explanation:

Because it is

PLEASEEEE HELP!!!!!!!!!!!!!!

Damon is working on a tight budget. He has just a few more scenes to shoot to complete his project. For one of the scene requires at least 50 extras. Hiring union extras will cost him more than the budget allows. what do you think he is likely to do to ensure the scene is shot within the budget?
A .Change the storyline
B. Deduct the scriptwriter's fees
C. Deduct the fees of the lead actor
D, hire non-union extras

Answers

Answer:

possibly d

Explanation:

makes more sense

TIMED QUIZ PLS HELP!!! 10 POINTS
You are using an email marketing service. They charge a setup fee of $250 plus $0.35 per email sent. How much will a 10,000 email mailing cost?

Answers

Answer:

$3,750

Explanation:

Answer:

c) 3,750

Explanation:

knowledge matters

Can you explain how you can use financial literacy skills to plan for your future?

Answers

Answer:

I am not sure, sorry.

Explanation:

Maybe you can use google.

differentiate between homogeneous mixtures and heterogeneous mixtures ​

Answers

Answer:

A homogeneous mixture is a solid, liquid or gaseous mixture that has the same proportions of its components throughout any given sample. Conversely, a heterogeneous mixture has components in which proportions vary throughout the sample.

what might of happened if a newly hired person filled out a W-4 form incorrectly

Answers

Answer:

If an error is made, and you accidentally under withhold an employee’s income tax, a bevy of issues can arise, beginning with tax liability. When you under withhold, money is owed to the federal government. And they will be sure to get it. In some cases this burden falls on the employee - which can result in a very unhappy worker, which is never good for a workplace. In other cases you and your employee can both be responsible for the missing money. The longer the mistake goes unnoticed, and the longer you’re underpaying employee payroll taxes, the bigger the tax penalties. You can be penalized for 100% of the money owed, plus interest as the months and years go by.

Explanation:

When an employer willfully under withholds or evades payroll taxes entirely, the consequences are steep. Knowingly evading taxes is a felony and can result in prison time - up to five years or more, depending on the severity and amount. Occasionally, the IRS may issue an audit on your company. Should this occur, you will need to present the necessary paperwork - i.e. employee W-4s - when asked. Having illegible forms may arise suspicion with auditors - whether these forms are malicious or not. If you enter in information from a W-4 incorrectly and realize before the IRS, there are measures you can take to rectify the issue before it snowballs. Typically when a miscalculation of allowances occurs, you would increase the withholding on that person’s paycheck to balance out their withholdings correctly for the year. Then moving forward, you would correct the W-4 and ensure their allowances are correct. Want to avoid issues like these entirely? Read more about how electronic withholding forms can make the W-4 process simple and automatic.

Answer:

B. That person might have a larger tax bill to pay on income taxes.

Hope this helps!

Also for next time please include the answer choices if they are given with the question in your assignment :)

Answer the question on the basis of the following production possibilities table for two countries, North Cantina and South Cantina.

Refer to the table. If South Cantina is producing at production alternative F, the opportunity cost of the first unit of capital goods will be

A.1/2 of a unit of consumer goods.
B.1 unit of consumer goods.
C.27 units of consumer goods.
D.2 units of consumer goods.

Answers

The answer is c
hope this helpful

'Opportunity Cost' is described as the 'value of the next best possible opportunity that is given up for choosing the other.'

In the given situation, the opportunity cost of producing the very first unit of Capital Goods for South Cantina would be:

C). 27 units of consumer goods.

As we know, 'opportunity cost' is the cost of the next best alternative and its benefits that are lost for producing the other. The loss that South Cantina would suffer for producing one unit of the capital good is worth '27 units of consumer goods.'This implies that the 27 consumer unit goods would be lost for not choosing it and producing 1 unit of capital goods.

Thus, option C is the correct answer.

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Listeners offer prompts to their speaker by _____.

Answers

Answer:

In any duel between a speaker and listener, it's always easy to fault the other person and it will begin with you. You can set the proper tone. Remember to take notes if you can.

Explanation:

Listen to what I'm saying and you will be good at it.

Answer:

Asking, “What happened then?”

Explanation:

Which of these is not a role of the Government?
A
Protector
B
Producer
C
Consumer
D
Provider

Answers

Answer:

A consumer because the citizens would be considered consumers not the government i think

Answer:

A consumer

Hope this helps!

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