You go to your bank and ask for a new loan, totaling to $50,000 to expand your business. They offer you a 1-year loan with a 10% interest rate, payable at the end of one year. One year later, when you go back to your bank to pay back your principal and interest, you notice the inflation has been 8% over the last year. What is your exact real interest rate you are paying to your bank? Question 1

options:

8%.

8.15%.

10%.

1.85%.

11.85%.

2%.