Imagine That You Borrow $1,000 for One Year and at the End

question 195

Multiple Choice

Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest.If the inflation rate was 7%,what was the real interest rate you paid?

• A)17 percent
• B)10 percent
• C)7 percent
• D)3 percent

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Definitions:

Own Bosses

A term often associated with entrepreneurship, indicating individuals who are self-employed and have full control over their work, decisions, and income.

Independent

Free from external control and constraint, often used to describe self-reliant businesses or individuals making decisions autonomously.

Influencing Odds

The act of affecting the probability or likelihood of a particular outcome or event.

Share the Risk

A strategy where risks are distributed among different parties, such as through partnerships or insurance, to reduce the impact on any single entity.