You open a savings account that pays 0.75% interest a year. What is your real rate of return if the inflation rate is 1%?
A)-0.25%
B)-0.75%
C)1%
D)1.75%

Name: You open a savings account that pays 0.75% interest a year. What is your real rate of return if the inflation rate is 1%? A)-0.25% B)-0.75% C)1% D)1.75%
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Question

Quizplus · Accepted Answer

The real rate of return is calculated by subtracting the inflation rate from the nominal interest rate. Therefore, 0.75% - 1% = -0.25%.

You Open a Savings Account That Pays 0