MathMaster logo

MathMaster

  1. Home
  2. general
  3. suppose that the one year real interest rate in period 0 is 12 and that the inflation rate is 4 5 so the nominal interest
Question

Suppose that the one-year real interest rate in period 0 is 12% and that the inflation rate is 4.5%. So the nominal interest rate is?

234

likes
1170 views

Answer to a math question Suppose that the one-year real interest rate in period 0 is 12% and that the inflation rate is 4.5%. So the nominal interest rate is?

Expert avatar
Seamus
4.9
99 Answers
1 + i = (1 + 0.12)(1 + 0.045)

1 + i = 1.12 \cdot 1.045

1 + i = 1.1694

i = 1.1694 - 1

i = 0.1694

i \approx 0.1704 \quad \text{or} \quad 17.04\%

The nominal interest rate, given a real interest rate of 12% and an inflation rate of 4.5%, is approximately 17.04%.

Frequently asked questions (FAQs)
Math question: Are two triangles with side lengths 5, 8, and 10 congruent?
+
What is the equation of a hyperbola with a horizontal transverse axis, centered at the origin, vertices at (+/- 3, 0), and asymptotes with slopes of +/- 1/2?
+
What is the length of the hypotenuse in a right triangle with one side measuring 5 units and the other side measuring 12 units?
+
New questions in Mathematics
1/2x +3 <4x-7
For a temperature range between 177 degrees Celsius to 213 degrees Celsius, what is the temperature range in degrees Fahrenheit.
Determine the absolute extrema of the function 𝑓(𝑥)=𝑥3−18𝑥2 96𝑥 , on the interval [1,10]
4X^2 25
A job takes 9 workers 92 hours to finish. How many hours would it take 5 workers to complete the same job?
2.3/-71.32
A National Solidarity Bond offers A 5 year bond offering a gross return of 15% Calculate the AER for this investment. (Give your answer to two decimal places, no need for the percent or € sign in your answer)
There are 162 students enrolled in the basic mathematics course. If the number of women is 8 times the number of men, how many women are there in the basic mathematics course?
You are the newly appointed transport manager for Super Trucking (Pty) Ltd, which operates as a logistics service provider for various industries throughout southern Africa. One of these vehicles is a 4x2 Rigid Truck and drawbar trailer that covers 48,000 km per year. Use the assumptions below to answer the following questions (show all calculations): Overheads R 176,200 Cost of capital (% of purchase price per annum) 11.25% Annual License Fees—Truck R 16,100 Driver Monthly cost R 18,700 Assistant Monthly cost R 10,500 Purchase price: - Truck R 1,130,000 Depreciation: straight line method Truck residual value 25% Truck economic life (years) 5 Purchase price: Trailer R 370,000 Tyre usage and cost (c/km) 127 Trailer residual value 0% Trailer economic life (years) 10 Annual License Fees—Trailer R 7,700 Fuel consumption (liters/100km) 22 Fuel price (c/liter) 2053 Insurance (% of cost price) 7.5% Maintenance cost (c/km) 105 Distance travelled per year (km) 48000 Truck (tyres) 6 Trailer (tyres) 8 New tyre price (each) R 13,400 Lubricants (% of fuel cost) 2.5% Working weeks 50 Working days 5 days / week Profit margin 25% VAT 15% Q1. Calculate the annual total vehicle costs (TVC)
X³-27
viii. An ac circuit with a 80 μF capacitor in series with a coil of resistance 16Ω and inductance 160mH is connected to a 100V, 100 Hz supply is shown below. Calculate 7. the inductive reactance 8. the capacitive reactance 9. the circuit impedance and V-I phase angle θ 10. the circuit current I 11. the phasor voltages VR, VL, VC and VS 12. the resonance circuit frequency Also construct a fully labeled and appropriately ‘scaled’ voltage phasor diagram.
A loan is repaid with payments of $2226 made at the end of each month for 12 years. If interest on the loan is 5.2%, compounded semi-annually, what is the initial value of the loan? Enter to the nearest cent (two decimals). Do not use $ signs or commas.
00 piece jigsaw puzzle. the completed puzzle is 10x10. each piech connects to at least 2 other pieces. i plan to assemble by taking pieces out of box one by one. if i've already taken out 2 pieces that dont directly connect, what is the minimum number of additional pieces that i need to draw to in order to guarentee that the original 2 pieces connect?
A post office has three categories of letters: 60% are from businesses, 30% are individual mail, and the remaining 10% are government mail. 5% of the letters from businesses have address errors, 10% of the individual mail has address errors, while 1% of the government mail has address errors. If we receive a letter with an address error, what is the probability that it is individual mail?"
Farm Grown, Inc., produces cases of perishable food products. Each case contains an assortment of vegetables and other farm products. Each case costs $5 and sells for $15. If there are any not sold by the end of the day, they are sold to a large food processing company for $3 a case. The probability that daily demand will be 100 cases is 0.30, the probability that daily demand will be 200 cases is 0.40, and the probability that daily demand will be 300 cases is 0.30. Farm Grown has a policy of always satisfying customer demands. If its own supply of cases is less than the demand, it buys the necessary vegetables from a competitor. The estimated cost of doing this is $16 per case. (a) Draw a decision table for this problem (b) What do you recommend?
2+2020202
Solve the following 9x - 9 - 6x = 5 + 8x - 9
It costs a manufacturer $2,500 to purchase the tools to manufacture a certain homemade item. If the cost for materials and labor is 60¢ per item produced, and if the manufacturer can sell each item for 90¢, find how many items must he produce and sell to make a profit of $2000?
A triangle is cut by a line s parallel to the base in such a way that it divides the side of the triangle into parts in the ratio of 2 : 3. Find the other side of the triangle if it is known that the line s divides it into parts whose length is 5 cm.
8(x+4) -4=4x-1

You might be interested in