1) You took a 1,000$ borrower, with an annual interest rate of 3 percent. How much money you will have to return after one year? After 2 years? After.

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Presentation transcript:

1) You took a 1,000$ borrower, with an annual interest rate of 3 percent. How much money you will have to return after one year? After 2 years? After 3 years?

How much money you will have to return after a year, if the interest is paid every 6 month? After 3 years?

2) If the nominal interest rate is 4 percent, and you pay it every 4 month, what is the effective interest rate? If you pay it every quarter, what is the effective interest rate?

3) The inflation rate is 3 percent per year. The real interest rate is 5 percent per year. What is the nominal interest rate?

4) The inflation rate is 2 percent per year. The nominal rate is 10 percent. What is the real interest rate?

5) The nominal interest rate is 12%. The real interest rate is 4%. What is the inflation rate?