Ask Question
BusinessBusiness
19 November, 15:36

Suppose you lend $1,000 at an interest rate of 10 percent over the next year. If the expected real interest rate at the beginning of the loan contract is 4 percent, then what rate of inflation over the upcoming year would be most beneficial to you as the lender? An inflation rate

+4
Answers (1)
  1. 19 November, 15:55
    0
    0%

    Explanation:

    Inflation rate shows a measure of rate at which the average price of a selected goods and services increases over time. It is usually expressed in percentage and shows how the strength of a currency is decreasing.

    For the lender, if the inflation rate increases, the purchasing power of the interest the lender would have gotten would be small, the value of the money would have reduced therefore it would be better for the lender if the inflation rate is 0%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose you lend $1,000 at an interest rate of 10 percent over the next year. If the expected real interest rate at the beginning of the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Which statement about deposits are true? Check all that apply A. Deposits increase the checking account balance B. A deposit is money that is subtracted from a bank account C.
Answers (2)
A company spends $50,000 this year in research and development for a new drug to cure liver damage. By the end of the year, management feels confident that the new drug will gain FDA approval and lead to higher future sales.
Answers (1)
Problem PageQuestion Charmaine's Coffee Shop makes a blend that is a mixture of two types of coffee. Type A coffee costs Charmaine $5.80 per pound, and type B coffee costs $4.15 per pound.
Answers (1)
Bristol, INC. paid $800 for a 4-month insurance policy on August 1 of the current year. On August 31, Bristol, Inc. made an adjusting entry to account for the insurance that expired during the month of August.
Answers (1)
A company under IFRS standards decides to include interest paid in the Financing Section of their Statement of Cash Flows.
Answers (1)
New Questions in Business
The pricing function is an integral part of the companies :
Answers (1)
A company calculates the value of inventory by using the lower-of-market valuation method. which value should the company report for the inventory item for the period?
Answers (1)
To test an herbal treatment for acid reflux disease, 100 volunteers who suffered from mild indigestion were randomly divided into two groups. Each person was given a month's supply of tea bags.
Answers (1)
A facility management pro forma cash flow statement has beginning accounts receivable and payable balances of ¥18,000,000 (Japanese Yen) and ¥20,000,000.
Answers (1)
Which of the following statements about the consumers' responses to rising gasoline prices is correct? a. Because gasoline is a necessity, consumers do not decrease their quantity demanded in either the short run or the long run. b.
Answers (1)
Home » Business » Suppose you lend $1,000 at an interest rate of 10 percent over the next year. If the expected real interest rate at the beginning of the loan contract is 4 percent, then what rate of inflation over the upcoming year would be most beneficial to you
Sign Up Forgot Password?