Discover the best answers at Westonci.ca, where experts share their insights and knowledge with you. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.
Sagot :
Certainly! Let's determine which bank option would be the best for Veronica, considering the current inflation rate of 2.5%.
### Step-by-Step Solution:
1. Interest Rates Offered by the Banks:
- Bank 1: 4% interest
- Bank 2: 3% interest
- Bank 3: 2.5% interest
- Bank 4: 3.5% interest
2. Inflation Rate:
- Current inflation rate is 2.5%.
3. Calculate the Real Interest Rate:
To find the real interest rate, we subtract the inflation rate from the nominal interest rate offered by each bank.
- Bank 1:
[tex]\[ \text{Real Interest Rate} = 4\% - 2.5\% = 1.5\% \][/tex]
- Bank 2:
[tex]\[ \text{Real Interest Rate} = 3\% - 2.5\% = 0.5\% \][/tex]
- Bank 3:
[tex]\[ \text{Real Interest Rate} = 2.5\% - 2.5\% = 0.0\% \][/tex]
- Bank 4:
[tex]\[ \text{Real Interest Rate} = 3.5\% - 2.5\% = 1.0\% \][/tex]
4. Compare the Real Interest Rates:
- Real interest rates for the banks are:
- Bank 1: 1.5%
- Bank 2: 0.5%
- Bank 3: 0.0%
- Bank 4: 1.0%
5. Determine the Best Option:
- The highest real interest rate is 1.5%, which is offered by Bank 1.
Therefore, the best option for Veronica, considering the current inflation rate of 2.5%, is a bank that offers 4% interest.
Hence, the correct choice is:
- A bank that offers 4% interest
### Step-by-Step Solution:
1. Interest Rates Offered by the Banks:
- Bank 1: 4% interest
- Bank 2: 3% interest
- Bank 3: 2.5% interest
- Bank 4: 3.5% interest
2. Inflation Rate:
- Current inflation rate is 2.5%.
3. Calculate the Real Interest Rate:
To find the real interest rate, we subtract the inflation rate from the nominal interest rate offered by each bank.
- Bank 1:
[tex]\[ \text{Real Interest Rate} = 4\% - 2.5\% = 1.5\% \][/tex]
- Bank 2:
[tex]\[ \text{Real Interest Rate} = 3\% - 2.5\% = 0.5\% \][/tex]
- Bank 3:
[tex]\[ \text{Real Interest Rate} = 2.5\% - 2.5\% = 0.0\% \][/tex]
- Bank 4:
[tex]\[ \text{Real Interest Rate} = 3.5\% - 2.5\% = 1.0\% \][/tex]
4. Compare the Real Interest Rates:
- Real interest rates for the banks are:
- Bank 1: 1.5%
- Bank 2: 0.5%
- Bank 3: 0.0%
- Bank 4: 1.0%
5. Determine the Best Option:
- The highest real interest rate is 1.5%, which is offered by Bank 1.
Therefore, the best option for Veronica, considering the current inflation rate of 2.5%, is a bank that offers 4% interest.
Hence, the correct choice is:
- A bank that offers 4% interest
Thank you for choosing our service. We're dedicated to providing the best answers for all your questions. Visit us again. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.