Suppose compu-global-hyper-mega-net borrows $100,000 from mel's savings and loan for one year at a 10% interest rate. at the end of the year; the owner, mr. simpson, has to repay $110,000. of the course of that same year, the average level of prices increases by 10%. what is the real interest rate of the loan?

The real interest rate of the loan is 0%

Explanation:

1. Let's review the information given to us to answer the question correctly:

Amount of the loan received by  Compu-Global-Hyper-Mega-Net = US$ 100,000

Interest rate of the loan = 10% annually

2. Of the course of that same year, the average level of prices increases by 10%. What is the real interest rate of the loan?

Let's use the formula of the real interest rate:

Real interest rate = Standard interest rate - Inflation or Increase on prices

Real interest rate = 10 -10

Real interest rate = 0%

a) both were commissioned explorers

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30