Suppose You Put $100 in the Bank on January 1

question 65

Multiple Choice

Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 2 percent and the inflation rate is 5 percent, you will be able to buy ________ worth of goods on January 1, 2018, valued at 2017's prices.

• A) $95
• B) $102
• C) $97
• D) $103
• E) -$3