Neco Model Questions Vol1 2024 Economics Question 11
Practice objective / multiple choice question 11 from the 2024 Neco Model Questions Vol1 Economics examination.
A consumer price index (CPI) was 120 at the start of 2022, rose to 132 at the end of 2023 and to 144 at the end of 2024. A bank offers a nominal interest rate of \(12\%\) per annum for a 2‑year fixed deposit starting on 1 January 2023, while another bank offers \(10\%\) per annum for a 3‑year fixed deposit starting on the same date. Assuming that inflation each year equals the percentage change in CPI for that year, which deposit option gives the higher real total return at the end of its term? State the option (2‑year or 3‑year).
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About This Question
This is Neco Model Questions Vol1 2024 Economics Question 11. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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