Assume you save $1,000 in a bank account that pays 8 percent interest per year and the inflation rate is 3 percent. At the end of the year you have earned

Name: Assume you save $1,000 in a bank account that pays 8 percent interest per year and the inflation rate is 3 percent. At the end of the year you have earned
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The nominal return is $80 (8% of $1,000), and the real return is the nominal return minus inflation, which is $80 - $30 (3% of $1,000) = $50.

Assume You Save $1,000 in a Bank Account That Pays