On 1 January 2000, Edward invested $10 000 at five per cent interest for one year.The CPI on 1 January 2000 stood at 1.60.On 1 January 2001, the CPI was 1.76.
a.What is the real interest rate?
b.If Edward borrowed the $10 000 from Jack at 10 per cent interest for one year, who benefits and who loses in this situation?

Question

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The Answer of On 1 January 2000, Edward invested $10 000 at five per cent interest for one year.The CPI on 1 January 2000 stood at 1.60.On 1 January 2001, the CPI was 1.76.
a.What is the real interest rate?
b.If Edward borrowed the $10 000 from Jack at 10 per cent interest for one year, who benefits and who loses in this situation?

On 1 January 2000, Edward Invested $10 000 at Five