You Lend $5,000 to a Friend for One Year at a Nominal

question 258

Multiple Choice

You lend $5,000 to a friend for one year at a nominal interest rate of 10%.The CPI over that year rises from 180 to 190.What is the real rate of interest you will earn?

• A)0%
• B)4.4%
• C)5.5%
• D)5.8%

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Definitions:

Semicircular Canals

Structures in the inner ear that are key to maintaining balance by detecting head movements.

Cupulae

Gelatinous, dome-shaped structures found in the semicircular canals of the inner ear, crucial for detecting rotational movements of the head.

Papilla

Small, nipplelike process; projection of the dermis, containing blood vessels and nerves, into the epidermis; projections on the surface of the tongue.

Fovea Centralis

A small depression in the retina of the eye where visual acuity is highest, containing a high density of cone cells for color vision.