Nominal Interest, Real Interest, and the Fisher Equation

12. Unemployment and Inflation / Nominal Interest, Real Interest, and the Fisher Equation / Problem 5

Problem 5

If you have \$1,000 in savings with a nominal interest rate of 3% and inflation is 1%, what is the real change in purchasing power after one year?

\$40 increase

\$10 increase

\$20 increase

\$30 increase