Assume the nominal interest rate is i = 10%, the real interest rate is r = 7%, and the rate of depreciation d = 6%.What is the rental cost of capital?

Name: Assume the nominal interest rate is i = 10%, the real interest rate is r = 7%, and the rate of depreciation d = 6%.What is the rental cost of capital?
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Question

Quizplus · Accepted Answer

The rental cost of capital is calculated as the sum of the real interest rate (r) and the depreciation rate (d). Therefore, the rental cost of capital = r + d = 7% + 6% = 13%.

Assume the Nominal Interest Rate Is I = 10%, the Real