Noah Puts Money in the Bank and Earns a 7

Multiple Choice

Noah puts money in the bank and earns a 7 percent nominal interest rate. What happens if the inflation rate is 3 percent?

A) Ralph will have 3 percent more money, which will purchase 5 percent more goods.
B) Ralph will have 3 percent more money, which will purchase 10 percent more goods.
C) Ralph will have 7 percent more money, which will purchase 4 percent more goods.
D) Ralph will have 7 percent more money, which will purchase 10 percent more goods.