Over the Past Year You Earned a Nominal Rate of Interest

question 29

Multiple Choice

Over the past year you earned a nominal rate of interest of 14 percent on your money.The inflation rate was 2 percent over the same period.The exact actual growth rate of your purchasing power was

• A)11.76%.
• B)16.00%.
• C)15.02%.
• D)14.32%.
• E)none of the above.

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Definitions:

Deposit

Money placed into a financial institution for safekeeping or in order to earn interest.

Annually

Pertaining to a period or event that occurs once every year.

Classic Automobile

A vintage or antique car often considered valuable due to its historical significance or rarity.

Valued

The importance, worth, or usefulness of something, often in terms of monetary worth.