Aditi Deposits $1000 into a Savings Account That Pays an Annual

Multiple Choice

Aditi deposits $1000 into a savings account that pays an annual interest rate of 5 percent. Over the course of a year, the inflation rate is 2 percent. What happens at the end of the year?

A) Aditi has $50 more in her account, and her purchasing power has increased by about $20.
B) Aditi has $50 more in her account, and her purchasing power has increased by about $30.
C) Aditi has $70 more in her account, and her purchasing power has increased about $50.
D) Aditi has $70 more in her account, and her purchasing power has increased about $20.