Waec Model Questions Vol1 2023 Economics Question 7
Practice objective / multiple choice question 7 from the 2023 Waec Model Questions Vol1 Economics examination.
A loan carries a nominal interest rate of 12% per annum. The inflation expected at the time of the loan was 5% per annum, but the actual inflation turned out to be 8% per annum. Using the exact Fisher formula, determine the real interest rate actually earned by the lender. Also compare it with the approximate real rate obtained by simply subtracting inflation from the nominal rate.
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About This Question
This is Waec Model Questions Vol1 2023 Economics Question 7. It is one of the objective questions from the 2023 Waec Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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