The real return is the difference between the nominal and actual rate of inflation. Therefore, the real return revived by Luigi will be 6%.
<u>Given</u><u> </u><u>the</u><u> </u><u>Parameters</u><u> </u><u>:</u>
- <em>Nominal rate = 7% </em>
- <em>Actual rate of inflation = 1%</em>
<em>Real return = Nominal rate - Actual rate of return </em>
Real Return = 7% - 1% = 6%
Therefore, the real return on Luigi's money would be 6%
Learn more : brainly.com/question/18801159
Answer:
fixed - monthly rent, car payment, savings for new guitar
variable - movies, video games, snacks
