You currently have $200 in the bank which pays a 5% pa interest rate. Apples currently cost $1 each at the shop and the inflation rate is 4% pa which is the expected growth rate in the apple price. All rates are given as effective annual rates. Which of the below statements is NOT correct? All answer options are rounded to 6 decimal places.

Question 8Select one:

a.

In 2 years the nominal apple price will be $1.0816.

b.

The real growth rate in the apple price is expected to be 0% pa.

c.

In 2 years your money in the bank will be worth $220.5 in nominal terms.

d.

In 2 years your money in the bank will be worth 196.208616 apples.

e.

The real bank interest rate is 0.961539% pa.