Sophia Puts Money in the Bank and Earns a 5

Multiple Choice

Sophia puts money in the bank and earns a 5 percent nominal interest rate.If the inflation rate is 2 percent,then after one year,

A) Sophia will have 3 percent more money,which will purchase 5 percent more goods.
B) Sophia will have 3 percent more money,which will purchase 7 percent more goods.
C) Sophia will have 5 percent more money,which will purchase 3 percent more goods.
D) Sophia will have 5 percent more money,which will purchase 7 percent more goods.