Rounded to the Nearest Month, Calculate How Long It Will

question 50

Multiple Choice

Rounded to the nearest month, calculate how long it will take money to lose half its purchasing power to a 3.25% inflation rate.

• A) 20 years and 10 months
• B) 21 years and 8 months
• C) 21 years and 10 months
• D) 22 years and 4 months
• E) 22 years and 8 months.

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Definitions:

Term Deposit

A type of bank deposit that is held at a financial institution for a fixed term or period of time, often yielding higher interest rates.

Matures

Refers to the final payment date of a financial instrument at which point the principal (and all remaining interest) is due to be paid.

Days

A unit of time measurement that typically represents a 24-hour period.

Loan

Funds lent with the anticipation of repayment plus an additional amount known as interest.