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Minchanka [31]
3 years ago
12

Suppose you place $10,000 in a retirement fund that earns a nominal interest rate of 8 percent. If you expect inflation to be 5

percent or lower, then you are expecting to earn a real interest rate of at least: _________
a. 1.6 percent.
b. 3 percent.
c. 4 percent.
d. 5 percent.
Business
1 answer:
notka56 [123]3 years ago
6 0

Answer:

b. 3 percent.

Explanation:

Real interest rate is nominal interest rate less expected inflation rate.

Real interest rate = nominal interest rate - expected inflation rate

8% - 5% = 3%

I hope my answer helps you

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