Tony Lent Dave $1,000 for One Year with the Understanding

question 98

Multiple Choice

Tony lent Dave $1,000 for one year with the understanding that Dave would repay $1,070.If the actual inflation rate was 7 percent,then the real rate of interest Tony received is _____.

• A)14 percent
• B)7 percent
• C)4 percent
• D)0 percent
• E)−7 percent

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Definitions:

Installment

A portion of a debt or loan that is paid at regular intervals, usually monthly, as part of a payment plan.

Child-free

The decision by individuals or couples not to have children, either for personal, environmental, or other reasons.

Representative

A person chosen or appointed to act or speak for another or others, typically in a political or organizational context.

Real Families

A concept emphasizing the diversity of family structures, challenging the traditional notion of a family being composed of two heterosexual parents and their biological children.