You currently have $300 in the bank which pays a 7% pa interest rate. Apples currently cost $1 each at the shop and the inflation rate is 8% 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 2 years the nominal apple price will be $1.1664.

b.

The real growth rate in the apple price is expected to be -0.925926% pa.

c.

In 2 years your money in the bank will be worth $343.47 in nominal terms.

d.

In 2 years your money in the bank will be worth $294.470166 in real terms.

e.

The real bank interest rate is -0.925926% pa.