Inflation and interest rates

The following table shows the average nominal interest rates on six-month Treasury bills between 1971 and 1975, which determined the nominal interest rate that the U.S. government paid when it issued debt in those years. The table also shows the inflation rate for the years 1971 to 1975. (All rates are rounded to the nearest tenth of a percent.)

Year	Nominal Interest Rate	Inflation Rate
(Percent)	(Percent)
1971	4.5	4.2
1972	4.5	3.3
1973	7.2	6.3
1974	8.0	11.0
1975	6.1	9.1

Source: "FRED Economic Data," Federal Reserve Bank of St. Louis, last modified September 23, 2019, accessed September 24, 2019, https://fred.stlouisfed.org.

On the following graph, use the orange points (square symbol) to plot the nominalinterest rates for the years 1971 to 1975. Next, use the green points (triangle symbol) to plot the realinterest rates for those years.

Nominal Interest RateReal Interest Rate19701971197219731974197519768.07.06.05.04.03.02.01.00-1.0-2.0-3.0INTEREST RATE (Percent)YEAR

According to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment?

1971

1972

1973

1974

1975