Given a Nominal Interest Rate of 6 Percent, in Which

Multiple Choice

Given a nominal interest rate of 6 percent, in which of the following cases would you earn the lowest after-tax real interest rate?

A) Inflation is 1 percent, and the tax rate is 10 percent.
B) Inflation is 2 percent, and the tax rate is 15 percent.
C) Inflation is 3 percent, and the tax rate is 20 percent.
D) Inflation is 4 percent, and the tax rate is 25 percent.