What Is the Real Rate of Interest on a $50,000

question 84

Multiple Choice

What is the real rate of interest on a $50,000 loan if $62,000 repays the loan after one year, given a rate of inflation of 12%?

• A)18%
• B)24%
• C)12%
• D)10%
• E)21%

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Definitions:

Dividend Growth Rate

The percentage rate of annual growth in the dividends a company pays out to shareholders.

Annual Dividend

The total dividend payment a company distributes to its shareholders annually, typically derived from its profits.

Capital Gain Yield

The change in the price of an investment, measured from the time of purchase to the current or sale time, expressed as a percentage.