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 6% 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?

Select one:

a.

In 3 years the nominal apple price will be $1.191016.

b.

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

c.

In 3 years your money in the bank will be worth $238.203199 in nominal terms.

d.

In 3 years your money in the bank will be worth 194.392856 apples.

e.

The real bank interest rate is -0.943396% pa.

Clear my choice