In late 2001, the inflation rate was about 2.9%. If you invested in a savings account with an annual interest rate of 7.5%, what was the real growth rate of this investment?
A) 3.24%
B) 4.19%
C) 4.47%
D) 5.03%

Question

Quizplus · Accepted Answer

Real growth rate is calculated by subtracting the inflation rate from the annual interest rate. Therefore, the real growth rate would be 4.6% (7.5% - 2.9%). Rounded to the nearest hundredth, the answer is 4.47%, which is choice C.

In Late 2001, the Inflation Rate Was About 2