Darla Puts Her Money into a Bank Account That Earns

question 208

Multiple Choice

Darla puts her money into a bank account that earns interest.One year later she sees that the account has 6 percent more dollars and that her money will buy 7.5 percent more goods.

• A)The nominal interest rate was 13.5 percent and the inflation rate was 7.5 percent.
• B)The nominal interest rate was 13.5 percent and the inflation rate was 1.5 percent.
• C)The nominal interest rate was 6 percent and the inflation rate was -1.5 percent.
• D)The nominal interest rate was 6 percent and the inflation rate was 7.5 percent.

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Definitions:

Sold

The act of transferring ownership of an item or asset for money or value in exchange.

Basis

The amount of investment in an asset for tax purposes, used to calculate gain or loss on the asset's disposition.

Liability

An obligation or debt owed to another party, which can be a factor in personal and business finances.

Gain or Loss

The financial result from selling an asset for more (gain) or less (loss) than its purchase price, important for tax calculations related to capital gains and losses.