SOLUTION: Is it D? I want to check my answer. Topic: Financial Mathematics Anika’s savings account has a stated interest rate of 2.5%. After inflation, the real return on her saving

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Question 1179979: Is it D? I want to check my answer.
Topic: Financial Mathematics
Anika’s savings account has a stated interest rate of 2.5%. After inflation, the real return on her savings account is 1%. What is the nominal interest rate on the account?
A. -1%

B. 1%

C. 1.5%

D. 2.5%
Answer by MathLover1(20849) About Me  (Show Source):
You can put this solution on YOUR website!

we know that:
a stated interest rate of 2.5%
the real return on her savings account is 1%.
The stated interest rate is a percentage which is calculated per year and refers to the return on the investment made.
The nominal interest rate is the rate received by the depositor before taking into account the inflation rate.
therefore:
The nominal+interest rate is equal to the stated+interest rate and does not include the inflation rate.
Since the stated+rate in this problem is 2.5%, the nominal rate of interest for this savings account is also 2.5%