If Treasury Bills Are Currently Paying 3

Multiple Choice

If Treasury bills are currently paying 3.05 percent and the inflation rate is 1.89 percent, what is the approximate real rate of interest? The exact real rate?

A) 1.16 percent; 1.14 percent
B) 1.21 percent; 1.14 percent
C) 1.20 percent; 1.21 percent
D) 1.19 percent; 1.16 percent
E) 1.19 percent; 1.21 percent