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A Year Ago, You Invested $10,000 in a Savings Account

Question 53

Multiple Choice

A year ago, you invested $10,000 in a savings account that pays an annual interest rate of 3%. What is your approximate annual real rate of return if the rate of inflation was 4% over the year?


A) 1%
B) −1%
C) 7%
D) 3%

Correct Answer:

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