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A Year Ago, You Invested $1,000 in a Savings Account

Question 1

Multiple Choice

A year ago, you invested $1,000 in a savings account that pays an annual interest rate of 6%. What is your approximate annual real rate of return if the rate of inflation was 2% over the year?


A) 4%
B) 2%
C) 6%
D) 3%

Correct Answer:

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