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Imagine That You Borrow $5,000 for One Year and at the End

Question 120

Multiple Choice

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest.If the inflation rate was 4%,what was the real interest rate you paid?


A) 16 percent
B) 12 percent
C) 8 percent
D) 6 percent

Correct Answer:

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