macroeconomics

posted by .

Suppose you were borrowing money to buy a car. Which of these situations would you prefer:The interest rate on your car loan is 20 percent and the inflation rate is 19 percent or the interest rate on your car loan is 5 percent and the inflation rate is 2 percent? explain

  • macroeconomics -

    Bobpursley already posted his answer.

    Which do you think is the better deal for you?

  • macroeconomics -

    The second case since the inflation is the increase in the price level and 2 percent is lower than 19 percent and the interset is also lower so i'll saved more money

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Macroeconomics

    Assignment Question I can't find an answer too: Assume that a series of inflation rates is 1 percent, 2 percent, and 4 percent, while nominal interest rates in the same three periods are 5 percent, 5 percent, and 6 percent, respectively. …
  2. macroeconomics

    Assume that a series of inflation rates is 1 percent, 2 percent, and 4 percent, while nominal interest rates in the same three periods are 5 percent, 5 percent, and 6 percent, respectively. a. What are the ex post real interest rates …
  3. Macroeconomics

    Assignment Question I can't find an answer too: Assume that a series of inflation rates is 1 percent, 2 percent, and 4 percent, while nominal interest rates in the same three periods are 5 percent, 5 percent, and 6 percent, respectively. …
  4. macro

    Suppose you were borrowing money to buy a car. Which of these situations would you prefer:The interest rate on your car loan is 20 percent and the inflation rate is 19 percent or the interest rate on your car loan is 5 percent and …
  5. macroeconomics

    If the operators of the golf course revised their revenue estimates so that each cart is expected to earn $100 less, how many carts would they buy at an interest rate of 8 percent?
  6. eco

    Suppose a person pays $80 of annual interest on a loan that has a 5 percent annual interest rate. The loan amount is: A. $400. B. $1,600. C. $160. D. $85. 10. Suppose a loan customer is considering two alternative $22,000 loans. Loan …
  7. Algebra

    This assignment is about a car loan. A financial institution in your community is advertising "Simple Interest Car Loans." Here is their ad. "Looking for an attractive loan for the car of your dreams?
  8. consumer math

    Alisha has a five-year car loan of $15,000 with an interest rate of 6 percent. If the interest is compounded annually, how much will she pay in total for her car?
  9. AP Macroeconomics

    3. You buy a certificate of deposit (CD) that pays a nominal rate of 12% annually. You have a tax rate of 25%, so if the interest on this CD is taxable (which it may not be) your after-tax nominal rate is (1 ñ 25%) • 12% = 9%. Since …
  10. macroeconomics

    Suppose you borrow $900 of principal that must be repaid at the end of two years, along with interest of 5 percent a year. If the annual inflation rate turns out to be 10 percent, (a) What is the real rate of interest on the loan?

More Similar Questions