Assume you borrowed $100,000 at a fixed rate of 7 percent for 30 years to purchase a house. if the inflation rate is 3 percent, then your repayments to the lender have purchasing power than the dollars that s/he loaned to you.
a) less
b) more
c) the same
d) none of the above

The correct answer is option B.

Explanation:

The rate of interest is given at 7%.

The rate of inflation is given at 3%.

This implies that the purchasing power is decreasing by 3% due to inflation. But it is also rising by 7% due to interest rate.

Since the increase in purchasing power is greater than decrease. After repayment the lender will have more purchasing power than he/she loaned out.

answer; i believe the correct answer is (form utility); good luck

answer; private store;