Economics 0455 · IGCSE · Inflation and deflation

Inflation and deflation — practice question

A person earns annual interest of $4\%$ on their savings. Inflation is $5\%$ each year. By approximately how much does the real value of their savings change?

  • A$-5\%$
  • B$-1\%$
  • C$+4\%$
  • D$+9\%$

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