Mr X Invests $1000 at 10% Nominal Rate for One

question 35

Multiple Choice

Mr. X invests $1000 at 10% nominal rate for one year. If the inflation rate is 4%, what is the real value of the investment at the end of one year?

• A) $1100
• B) $1000
• C) $1058
• D) None of the above

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Definitions:

Minerals

Inorganic substances required in small amounts for the body's metabolic processes, including bone formation and hormone synthesis.

Sugars

Simple carbohydrates that are used as a primary source of energy by living organisms.

Tracheids

Long, narrow water-conducting cells found in the xylem of vascular plants, contributing to the transport of water and minerals.

Vessel Elements

Components of the xylem in plants, responsible for conducting water and minerals from the roots to the rest of the plant.