Waec Model Questions Vol1 2021 Economics Question 27
Practice objective / multiple choice question 27 from the 2021 Waec Model Questions Vol1 Economics examination.
A 2‑year loan carries a nominal interest rate of 12% per annum. The Consumer Price Index (CPI) was 110 at the start of the first year, 115 at the end of the first year and 121 at the end of the second year. Determine the average expected inflation rate per annum over the two years and then compute the real interest rate using the Fisher approximation (real ≈ nominal - inflation). Give the real rate to two decimal places.
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About This Question
This is Waec Model Questions Vol1 2021 Economics Question 27. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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