Neco Model Questions Vol1 2018 Economics Question 29
Practice objective / multiple choice question 29 from the 2018 Neco Model Questions Vol1 Economics examination.
In 2025 the expected inflation rate is 8% per annum. Two bank accounts are offered: Account A pays a nominal interest rate of 12% compounded annually, while Account B pays a nominal rate of 9% compounded semi‑annually (i.e., 4.5% each half‑year). Which account provides the higher effective real interest rate? State the effective real rate of the better account, rounded to two decimal places.
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About This Question
This is Neco Model Questions Vol1 2018 Economics Question 29. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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