Samantha Is Lending Jack $1,000 for One Year

question 76

Multiple Choice

Samantha is lending Jack $1,000 for one year.The consumer price index is 160 at the time the loan is made and they expect it to be 168 in one year.If Samantha and Jack agree that Samantha should earn a 3% real return for the year,the nominal interest rate on this loan should be

• A) 0%.
• B) 3%.
• C) 5%.
• D) 8%.
• E) 15%.

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Aggression

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