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You are concerned about inflation eroding your college savings. You should put your money in an account that offers

A: an interest rate lower than inflation
B: an interest rate higher than inflation
C: low balance transfer fees
D: FDIC insurance

2 Answers

2 votes

Answer:

Option B: An interest rate higher then inflation

Step-by-step explanation:

User Hoa Nguyen
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3 votes

Answer:

Option B

Step-by-step explanation:

In simple words, the given case relates to the time value of money. As the inflation in the economy rises the price level also rises leading to lower value of the money in the accounts.

If a depositor gets interest on his or her savings more than the inflation rate than they will get their money worth as per the standards of the inflation. Thus, we can conclude that the correct option is B.

User Anuar
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