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Jack Invested $1200 into an Account for 5-Years

Question 9

Multiple Choice

Jack invested $1200 into an account for 5-years.The account paid interest at j1 = 4% for the first 2-years and j1 = 6% thereafter.If the annual inflation rate is 2% for each of these 5-years,what is the annual real rate of interest earned over the 5-years?


A) 3.92%
B) 3.13%
C) 2.94%
D) 1.96%

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