Carlos Borrowed $100 for a Year at 5% Interest

question 100

Multiple Choice

Carlos borrowed $100 for a year at 5% interest. At the end of the year, he repaid the loan with a payment of $105. The inflation rate that year was 4%. The real rate of interest on his loan was:

• A) 9%.
• B) 5%.
• C) 4%.
• D) 1%.

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Definitions:

Point Bar

A series of low, arcuate ridges of sand and gravel deposited on the inside of a stream bend or meander.

Load Of Sediment

The amount of sediment transported by a fluid, often water or wind, measured over a specific period.

Landslides

Sudden and rapid movement of a large amount of earth material, such as rock and soil, down a slope due to gravity.

Sinuosity

The amount a river or stream channel curves for a given length.