The Nominal Interest Rate Tells You

question 152

Multiple Choice

The nominal interest rate tells you

• A)how fast the number of dollars in your bank account rises over time.
• B)how fast the purchasing power of your bank account rises over time.
• C)the number of dollars in your bank account today.
• D)the purchasing power of your bank account today.

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Definitions:

Overestimate

To assess something as being larger, better, or more important than it actually is.

Underestimate

To judge something below its actual value, size, or importance.

Accomplish

To complete successfully or to achieve a set goal or objective.

Year

A period of approximately 365 or 366 days, divided into 12 months, used in the Gregorian calendar to measure the time a complete orbit of the Earth around the Sun takes.