You currently have $300 in the bank which pays a 9% pa interest rate. Apples...
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Finance
You currently have $300 in the bank which pays a 9% pa interest rate. Apples currently cost $1 each at the shop and the inflation rate is 8% pa which is the expected growth rate in the apple price. All rates are given as effective annual rates. Which of the below statements is NOT correct? All answer options are rounded to 6 decimal places.
Select one:
a. In 1 year the nominal apple price will be $1.08.
b. The real growth rate in the apple price is expected to be 0.925926% pa.
c. In 1 year your money in the bank will be worth $327.000001 in nominal terms.
d. In 1 year your money in the bank will be worth 302.777779 apples.
e. The real bank interest rate is 0.925926% pa.
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