If a Bank Advertises 3 Percent Interest for a Checking

Multiple Choice

If a bank advertises 3 percent interest for a checking account and the anticipated rate of inflation is 3.5 percent

A) the real rate of interest earned on the account is 0.5 percent.
B) the real rate of interest earned on the account is -0.5 percent.
C) the real rate of interest earned on the account is 6.5 percent.
D) the real rate of interest earned on the account is 3.25 percent.