You deposit $600 in a savings account and one year later you have $654. At the same time, the CPI increases from 160 to 166.4. The nominal interest rate is % and the real interest rate is %. Enter numbers rounded to the nearest whole number.

You deposit $600 in a savings account and one year later you have $654. At the same time, the CPI increases from 160 to 166.4. The nominal interest rate is % and the real interest rate is %. Enter numbers rounded to the nearest whole number.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

You deposit $600 in a savings account and one year later you have $654. At the same
time, the CPI increases from 160 to 166.4. The nominal interest rate is
% and the real interest rate is
%.
Enter numbers rounded to the nearest whole number.

Expert Solution

Step 1

Given that,

Deposit (P) = $600.

Amount after one year (A) = $654.

Time period (t) = 1 year

Step by step

Solved in 3 steps with 2 images

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