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If You Pay $1,980 Annually on an $18,000 Loan and the Rate

Question 238

Multiple Choice

If you pay $1,980 annually on an $18,000 loan and the rate of inflation is 3 percent, then the


A) real rate of interest is 8 percent
B) nominal rate of interest is 8 percent.
C) real rate of interest is 11 percent.
D) nominal rate of interest is 14 percent.

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