Multiple Choice
Assume that Sarah agrees to lend $100 to Sam for one year. Sam agrees to pay Sarah $110 at the end of the year. If inflation over that one year is 7%, what real rate of interest does Sarah earn on her $100?
A) 10%
B) 17%
C) 7%
D) 13%
E) 3%
Correct Answer:
Verified
Correct Answer:
Verified
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