Interest rate quoted as an effective annual rate

Assignment Help Business Economics

Reference no: EM13861965

Suppose your Zimbabwean bank account pays interest monthly with the interest rate quoted as an effective annual rate (EAR) of 50%. (a) What percent interest will you earn each month? (b) Suppose the weekly inflation rate in Zimbabwe is 1%. What is the yearly inflation rate? (c) What is the real interest rate on your Zimbabwean bank account? Use the exact formula and not the approximation.

Reference no: EM13861965

Questions Cloud

Two ways to get the money : Assume that you have two ways to get the money, one way is to have it at present, so PV=10,000, another way is to get it in the future, so FV=11,000. Which one would you like to choose ? Why?

Zero-coupon bond with a yield to maturity : Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the bond for five years before selling it. a. If the bond's yield to maturity is 6% when you sell it, what is the internal rate of return of your investment?

What is a lorenz curve draw one, labeling the axes : 1. This question refers to income distribution. (1) what is a Lorenz curve? Draw one, labeling the axes (2)Explain why a Lorenz curve can never lie to the left or above the 45 degree line (3)Using a Lorenz curve diagram, explain how to calculate ..

What will be the book value of the purchase after first year : What will be the book value of this purchase (excluding all other Plant and Equipment) after its first year of use? Use generally accepted (FASB) accounting principles.

Interest rate quoted as an effective annual rate : Suppose your Zimbabwean bank account pays interest monthly with the interest rate quoted as an effective annual rate (EAR) of 50%. (a) What percent interest will you earn each month? (b) Suppose the weekly inflation rate in Zimbabwe is 1%. What is th..

Clarissa''s utility function i : Clarissa's utility function is U(r, z) = z + 160r - r^2, where r is the number of rose plants she has in her garden and z is the number of zinnias. She has 250 square feet to allocate to roses and zinnias. Roses each take up 4 square feet and zinnia..

National defense rather than state governments : List the three most important expenditure programs of the federal government. How do these differ from the three most important expenditure programs of state and local governments? Explain why it makes more sense for the federal government to purchas..

Verify that hicksian and walrasian demand coincide : Verify that Hicksian and Walrasian demand coincide.

Important expenditure programs of the federal government : List the three most important expenditure programs of the federal government. How do these differ from the three most important expenditure programs of state and local governments? Explain why it makes more sense for the federal government to purchas..

User Account

All Pages