You Borrow $10,000 from a Bank for One Year at a Nominal

question 247

Multiple Choice

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.If inflation over the year is 2%,what is the real interest rate you are paying?

• A)2%
• B)2.5%
• C)3%
• D)5%

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Definitions:

Organic Compound

A chemical compound containing carbon, which is typically found in living systems and includes carbohydrates, lipids, proteins, and nucleic acids.

Blood pH

The measure of the acidity or alkalinity of blood, crucial for maintaining homeostasis, with a normal range typically between 7.35 and 7.45.

Carbon Dioxide

This gas, which lacks both color and odor, is created from burning carbon-containing materials and through the act of respiration. It's a natural part of the air and is consumed by plants for photosynthesis.

Nucleotides

The basic structural units of nucleic acids, like DNA and RNA, consisting of a sugar, a phosphate, and a nitrogenous base.