contestada

You loaned $100 to a friend for one year at a nominal rate of interest of 3 percent. Inflation during that year was 2 percent. How much did the purchasing power of your money change (an increase is positive and a decrease is negative)

Respuesta :

abiolataiwo2015

Based on the information given the purchasing power of your money change Increase by approximately 1 percent.

Purchasing power

Using this formula

Purchasing power=Nominal rate of interest-Inflation rate

Where:

Nominal rate=3%

Inflation rate=2%

Let plug in the formula

Purchasing power=3%-2%

Purchasing power=1% increase

Inconclusion the purchasing power of your money change Increase by approximately 1 percent.

Learn more about purchasing power here:https://brainly.com/question/14878357