Question

with no inflation, a bank would be willing to lend a business firm $10 million at an annual interest rate of 8%. but if the rate of inflation was anticipated to be 6%, the bank would charge the firm an annual interest rate of

Answer 1

14 Percent is the annual interest rate that the bank would charge.

Annual Percentage Rate (APR) refers to the annual interest accrued by the amount billed to the borrower or paid to the investor. APR is expressed as a percentage representing the actual annual cost of financing or income generated from an investment over the term of the loan.

Inflation is an increase in prices that can be translated as a decrease in purchasing power over time. The rate of decline in purchasing power is reflected in the average price increase over a period of time for a basket of selected goods and services. A price increase, often expressed as a percentage, means that a currency unit is buying substantially less than in the previous period. Inflation is in contrast to deflation, which occurs when prices fall and purchasing power increases.

To learn more about Annual interest rate click here: https://brainly.com/question/29492043

#SPJ4