If Interest Rate Parity Holds and the Annual German Nominal

If interest rate parity holds and the annual German nominal interest rate is 3% and the U.S. annual nominal rate is 5% and real interest rates are 2% in both countries, then inflation in Germany is about _______________ than in the United States.

A) 1% higher
B) 2% higher
C) 1% lower
D) 4% lower
E) 2% lower