Neco Model Questions Vol1 2018 Economics Question 46
Practice objective / multiple choice question 46 from the 2018 Neco Model Questions Vol1 Economics examination.
The Consumer Price Index (CPI) was 120 at the end of 2017 and rose to 132 at the end of 2018. A savings account offers a nominal interest rate of 12% per annum, compounded annually. A depositor places \(\text{₦}10,000\) in the account at the start of 2017 and leaves it for two years, assuming the same nominal rate and that the inflation rate each year equals the CPI‑based inflation calculated above. What is the percentage increase in the real purchasing power of the depositor's money at the end of 2018 compared to the initial amount?
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About This Question
This is Neco Model Questions Vol1 2018 Economics Question 46. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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