If a Bank Advertises 3 Percent Interest for a Checking

question 327

Multiple Choice

If a bank advertises 3 percent interest for a checking account and the anticipated rate of inflation is 3.5 percent

• A) the real rate of interest earned on the account is 0.5 percent.
• B) the real rate of interest earned on the account is -0.5 percent.
• C) the real rate of interest earned on the account is 6.5 percent.
• D) the real rate of interest earned on the account is 3.25 percent.

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Definitions:

Butan-1-Ol

An alcohol with the chemical formula C4H9OH, represented by a four-carbon chain with the -OH group attached to the first carbon.

Decan-1-Ol

An organic compound and a fatty alcohol, consisting of a ten carbon chain terminating in a hydroxyl group.

IUPAC Name

The IUPAC Name refers to the systematic naming convention for chemical compounds as designated by the International Union of Pure and Applied Chemistry.

Hydrophilic

Having an affinity for water; capable of interacting with or dissolving in water.