Lexi earns a nominal rate of return of 12.2% this year on her investment.If inflation is calculated at 2.1% for the year,what is her approximate real rate of return for the year?
A)14.3%
B)2.1%
C)10.1%
D)12.2%

Question

Quizplus · Accepted Answer

The real rate of return can be calculated by subtracting the inflation rate from the nominal rate of return. Therefore, Lexi's approximate real rate of return for the year is 12.2% - 2.1% = 10.1%. Option C is the closest answer at 10.1%.

Lexi Earns a Nominal Rate of Return of 12