Question

If the annual interest paid on a $500 loan is $25, the nominal interest rate is _ per cent per year. If the nominal interest rate is 5 per cent per year and the inflation rate is 2 per cent a year, the real interest rate is _ per year. A: 3; 5 B. 4; 4 C. 5; 7 D. 5; 3 choose the correct reply

Name: if the annual interest paid on a 500 loan is 25 the nominal interest rate is per cent per year if the nominal interest rate is 5 per cent per year and the inflation rate is 2 per cent 78376
Uploaded: 2022-05-27T15:12:18-08:00
Duration: 3 min 4 s
Channel: Derek Fairburn
Description: if the annual interest paid on a 500 loan is 25 the nominal interest rate is per cent per year if the nominal interest rate is 5 per cent per year and the inflation rate is 2 per cent 78376

          If the annual interest paid on a $500 loan is $25, the nominal interest rate is _____ per cent per year. If the nominal interest rate is 5 per cent per year and the inflation rate is 2 per cent a year, the real interest rate is _____ per year.   A: 3; 5   B. 4; 4 C. 5; 7  D. 5; 3 choose the correct reply

Added by Amanda D.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Derek Fairburn

05/27/2022

Step 1

Step 1: To find the nominal interest rate, we need to divide the annual interest paid ($25) by the loan amount ($500) and then multiply by 100 to convert it to a percentage. Show more…

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If the annual interest paid on a $500 loan is $25, the nominal interest rate is _____ per cent per year. If the nominal interest rate is 5 per cent per year and the inflation rate is 2 per cent a year, the real interest rate is _____ per year. A: 3; 5 B. 4; 4 C. 5; 7 D. 5; 3 choose the correct reply