QuestionJuly 7, 2025

An overseas bank announces that it is introducing a new type of savings account paying a 3 percent fixed rate of interest for deposits of one-year duration. This 3 percent is: A real rate of interest A post-tax rate of interest A long-term rate of interest. A nominal rate of interest

An overseas bank announces that it is introducing a new type of savings account paying a 3 percent fixed rate of interest for deposits of one-year duration. This 3 percent is: A real rate of interest A post-tax rate of interest A long-term rate of interest. A nominal rate of interest
An overseas bank announces that it is introducing a new type of
savings account paying a 3 percent fixed rate of interest for
deposits of one-year duration. This 3 percent is:
A real rate of interest
A post-tax rate of interest
A long-term rate of interest.
A nominal rate of interest

Solution
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Answer

A nominal rate of interest Explanation 1. Identify the type of interest rate The 3 percent fixed rate is stated without any adjustments for inflation, taxes, or long-term considerations. This indicates it is a nominal rate of interest.

Explanation

1. Identify the type of interest rate<br /> The 3 percent fixed rate is stated without any adjustments for inflation, taxes, or long-term considerations. This indicates it is a nominal rate of interest.
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