Jordan loaned taylor $1,200 on march 15, 2009. taylor returned $1,260 on march 14, 2010. inflation was 2% over the 1-year period. what is the real interest rate that taylor paid?

a. 2%

b. 3%

c. 5%

d. 7%

Question

Armando Contreras

Business

7 August, 06:24

Jordan loaned taylor $1,200 on march 15, 2009. taylor returned $1,260 on march 14, 2010. inflation was 2% over the 1-year period. what is the real interest rate that taylor paid?

a. 2%

b. 3%

c. 5%

d. 7%

+3

Answers (1)

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Mo · Answer 1

To calculate the real interest rate that Taylor paid, I would take the $1200 and see what 2% of that is for the year and it comes to $24. So take the $1260 he paid - $24=$1236 and 36/1200 = 0.03 or 3%. So I believe that this 3% is the real rate that Taylor paid for interest on the $1200.

Jordan loaned taylor $1,200 on march 15, 2009. taylor returned $1,260 on march 14, 2010. inflation was 2% over the 1-year period. what is the real interest rate that taylor paid?a. 2%b. 3%c. 5%d. 7%

Jordan loaned taylor $1,200 on march 15, 2009. taylor returned $1,260 on march 14, 2010. inflation was 2% over the 1-year period. what is the real interest rate that taylor paid?

a. 2%

b. 3%

c. 5%

d. 7%