Sally has a credit card balance of $2,000. The credit card company charges a nominal interest rate of 14 percent a year on unpaid balances. The inflation rate is 5 percent a year. Calculate the real interest rate that Sally pays the credit card company. The real interest rate that Sally pays the credit card company is ____ percent a year.
Sally has a credit card balance of $2,000. The credit card company charges a nominal interest rate of 14 percent a year on unpaid balances. The inflation rate is 5 percent a year. Calculate the real interest rate that Sally pays the credit card company. The real interest rate that Sally pays the credit card company is ____ percent a year.
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 13P
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Sally has a credit card balance of $2,000. The credit card company charges a nominal interest rate of 14 percent a year on unpaid balances. The inflation rate is 5 percent a year.
Calculate the real interest rate that Sally pays the credit card company.
The real interest rate that Sally pays the credit card company is
____ percent a year.
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