Assume That Sarah Agrees to Lend $100 to Sam for One

question 96

Multiple Choice

Assume that Sarah agrees to lend $100 to Sam for one year.Sam agrees to pay Sarah $110 at the end of the year.If inflation over that one year is 7%,what real rate of interest does Sarah earn on her $100?

• A)10%
• B)7%
• C)3%
• D)13%
• E)17%

---

Definitions:

Biological Entities

Organisms or living systems that are capable of functioning independently, including everything from single-celled bacteria to humans and complex plants.

Mutually Beneficial Interactions

Exchanges or associations that provide positive outcomes for all parties involved.

Business Strategies

Plans of action or policies designed to achieve significant goals or objectives within the competitive business environment.

Social Value

The importance or benefit that something provides to society or a community at large.