Suppose a credit union strives for a 3 real return on its loans ...

[Alainaaa8]

Suppose a credit union strives for a 3 real return on its loans to members, and expects a 2 inflation rate. What nominal rate of interest should it charge its members?
 
  A) 0
  B) 1
  C) 3
  D) 6

Question 2

Suppose a bank wants a 5 real return on its loans, and contemplates a 1 annual inflation rate. The bank should therefore charge a nominal interest rate of
 
  A) 1.
  B) 4.
  C) 5.
  D) 6.

[kristenb95]

Answer to Question 1

B

Answer to Question 2

D

[Alainaaa8]

TYSM

[Animal_Goddess]

Gracias!