Neco 2025 Economics Question 34

Practice objective / multiple choice question 34 from the 2025 Neco Economics examination.

Neco 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 34 NECO • 2025 • ECONOMICS • objective

In 2022 the Consumer Price Index (CPI) of a country was \(120\) (base year 2010 = 100). A savings account offers a nominal interest rate of \(12\%\) per annum. The government expects inflation to be \(8\%\) next year. Using the Fisher equation, calculate the real interest rate (to two decimal places) and the real value of a \(\text{₦}10,000\) deposit after one year.

Answer Options

Correct Answer A. Real interest rate = 3.70%, Real value = ₦10,370
B. Real interest rate = 4.00%, Real value = ₦10,400
C. Real interest rate = 3.80%, Real value = ₦10,380
D. Real interest rate = 3.70%, Real value = ₦10,360
Correct Answer
A
Correct Option:
Real interest rate = 3.70%, Real value = ₦10,370

About This Question

This is Neco 2025 Economics Question 34. It is one of the objective questions from the 2025 Neco Economics examination.

Difficulty level: Medium .

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