Ask Question
5 February, 02:58

Suppose Rosa is a sports fan and buys only baseball caps. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a baseball cap is priced at $15.00. Initially, the purchasing power of Rosa's $3,000 deposit is ___ baseball caps.

+5
Answers (1)
  1. 5 February, 05:08
    0
    Purchasing power of Rosa's $3,000 deposit is 200 baseball caps.

    Explanation:

    Purchasing Power = Money / Price

    Eg : If Rs 100 is available, Price level = Rs 10

    Purchasing power = 100/10 = 10

    Similarly, Purchasing power of $3000 deposit with price level $15 is : -

    3000/15 = 20 Baseball caps
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose Rosa is a sports fan and buys only baseball caps. Rosa deposits $3,000 in a bank account that pays an annual nominal interest rate ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers