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Suppose Your Bank Pays You 5% Interest Per Year on Your

Question 14

Multiple Choice

Suppose your bank pays you 5% interest per year on your savings account while prices increase by 3% per year over that time. Approximately how much nominal value do you gain by keeping $100 in the bank for a year?


A) $0
B) $2.00
C) $5
D) $2.50

Correct Answer:

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