Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?

a. More than today

b. Exactly the same

c. Less than today

d. I do not know

Question

Mathematics

Trystan Bradshaw

30 January, 07:54

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?

a. More than today

b. Exactly the same

c. Less than today

d. I do not know

+3

Answers (1)

Know the Answer?

Gerald Adams · Answer 1

C Less than today

Step-by-step explanation:

If i save $100 at 1% per annum after 1 year I will get $101, but with inflation rate of 2%per annum a commodity that is worth $100 now will be worth $102 after 1 year so u can't buy same commodity I can buy today after 1 year even when my money has increase.

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?a. More than todayb. Exactly the samec. Less than todayd. I do not know

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?

a. More than today

b. Exactly the same

c. Less than today

d. I do not know