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It depends, among other factors, on
- the country and expectations about inflation,
- the degree of competition between banks,
- the borrowers' creditworthiness.
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∙ 10y ago
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Banks that compound interest?
All banks do this.
What is a simple interest in math?
Simple interest is interest that is calculated only on the amount of unpaid principal on a loan. Such interest is not added to the value of the loan but is tracked separately. Compound interest is interest that is calculated on the total of unpaid principal and accumulated interest on a loan. The difference is in simple interest there is no interest charged on accumulated interest while in compound interest there is interest charged on accumulated interest.
How do you calculate nominal interest rate?
Nominal interest, is the amount of interest on a loan or investment that does not take into account inflation; it's the amount of interest listed on the loan or bond.
How much is the interest rate on 14289.00 at 3.5 percent for five years how much will you pay in interest on a loan?
The interest rate is given in the question. It is 3.5%.The amount of interest paid on the loan depends on how much of the loan (if any) is paid back during the period of the loan. If there are no interim payments, the total interest at the end of 5 years is 2681.85 approx.
The concepts of simple interest?
Simple interest is interest that is applied to the original amount for the whole period of the investment or loan. This is unlike compound interest where the interest received on an investment is re-invested, or the interest due on a loan is added to the loan outstanding if unpaid, and so itself gains interest. With simple interest on loans, it is often calculated that borrowing a certain amount for a number of years will be charged at a certain rate for the whole period; then at the end of the period of borrowing the original loan and all the interest are repaid at that moment. However, if monthly repayments are made, then part of the original loan as well as the interest for the month are repaid; this means that not all the loan is borrowed for the whole period and so the real [effective] rate of interest for the period is actually higher than the given rate as that given rate assumes no part of the loan is repaid until the very end.
What can the Fed accomplish by raising or lowering the required reserve ratio?
If they lower the ratio, banks do not have to hold as much cash (which gains no interest), the banks will attempt to loan this money out and make money, this can stimulate investment. Increase or decrease in the money supply (APEX)
Would banks decrease or increase interest rates if they had less money to loan?
If banks had less money to loan they would increase their interest rates. This is because they would have to make the most profit off of the little money that they had to use. When banks have a lot of money to loan, interest rates are lower because they can still get a lot of interest even from the lower interest rates.
How does the fed encourage banks to loan more money?
The Fed encourages banks to loan more money by:Reducing the Cash Reserve Ratio (Money that needs to be deposited with the fed by every bank) This way banks have more cash to lend and hence they loan it to customersReducing Interest Rates - By reducing interest rates, loans become cheaper thereby prompting customers to take new loans which encourages banks to lend more loans in order to gain new business
What are the three types of interest rates in banks?
mortages loan
How is interest calculated for home loan in banks?
it is calculated by 6% of the cpi
What banks have the lowest interest loan rates?
Most banks offer competitive loan interest rates as the banks do not wish to lose customers. If one happens to find a lower rate than they are being offered at their bank, one would simply need to talk to their loan office and negotiate the rate.
The lowest rate of interest which banks can offer is called the?
reserve ratio ;p
What do you mean by loan?
A loan is a thing that is borrowed, especially a sum of money that is expected to be paid back with interest. Banks can give these out.
How does charging interest encourhe banks to make loans?
It depends bank and which loan you take.
How are interest only loans calculated by banks?
By using the principal amount and the interest to calculate the total. This is the rate of interest. Also they take into consideration the loan length and time you would pay back the loan.
What describes how lowering the required reserve ratio reduces the money supply?
When the required reserve ratio is lowered, banks can loan out more money.
What is the payment for a 3000 loan for 18 months?
Depends mostly on the interest rate. There are quite a few banks that have loan calculators on their website.
