A Bond That Pays Interest Annually Yielded 7

A bond that pays interest annually yielded 7.47 percent last year.The inflation rate for the same period was 4 percent.What was the actual real rate of return on this bond for last year?

A) 2.19 percent
B) 2.25 percent
C) 3.34 percent
D) 3.41 percent
E) 3.49 percent