9. Kaitlin has $10,000 of savings that she may deposit with her local bank. Kaitlin wants to earn a real rate of return of at least 4 percent and she is expecting inflation to be exactly 3 percent.

What is the lowest nominal interest rate that Kaitlin would be willing to accept from her local bank? LO29.4

a. 4 percent.

c. 6 percent.

b. 5 percent.

d. 7 percent.