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MMLU-Pro / 7540 / Suppose we have a bond that sells for 1,000.Theannualinterestpaidis80.…

Problem

Answer published by the source. Consult the official source to check your work against its answer.

question

Suppose we have a bond that sells for 1,000.Theannualinterestpaidis1,000. The annual interest paid is 80. However, the monetary authorities have predicted that the gen-eral price level will increase next year by 5 percent. Given these facts, compute the; a)nominalinterest rate.b)realinterest rate.
Plain-text mathematical notation (without MathML)
Suppose we have a bond that sells for 1,000.Theannualinterestpaidis80. However, the monetary authorities have predicted that the gen-eral price level will increase next year by 5 percent. Given these facts, compute the; a)nominalinterest rate.b)realinterest rate.
Original LaTeX notation
Suppose we have a bond that sells for $1,000. The annual interest paid is $80. However, the monetary authorities have predicted that the gen-eral price level will increase next year by 5 percent. Given these facts, compute the; a)nominalinterest rate.b)realinterest rate.

category

economics

options

  1. Nominal interest rate is 7 percent per year, Real interest rate is 2 percent
  2. Nominal interest rate is 9 percent per year, Real interest rate is 4 percent
  3. Nominal interest rate is 5 percent per year, Real interest rate is 3 percent
  4. Nominal interest rate is 7.5 percent per year, Real interest rate is 2.5 percent
  5. Nominal interest rate is 10 percent per year, Real interest rate is 5 percent
  6. Nominal interest rate is 6 percent per year, Real interest rate is 1 percent
  7. Nominal interest rate is 8 percent per year, Real interest rate is 3 percent
  8. Nominal interest rate is 4 percent per year, Real interest rate is -1 percent
  9. Nominal interest rate is 8.5 percent per year, Real interest rate is 3.5 percent
  10. Nominal interest rate is 3 percent per year, Real interest rate is 8 percent

src

stemez-Economics

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Source and history

upstream_id / Original problem ID
7540
task_id
7507874a-e848-5cd2-9346-a8c1d2dbebc8
task_key
default--test--7540
task_revision_id
1
config / split
default / test

Official source

initial import