Question

Suppose Valerie is an avid reader and buys only mystery novels. Valerie deposits $3,000 in a bank account that pays an annual nominal interest rate of 15%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a mystery novel is priced at $15.00. Initially, the purchasing power of Valerie's $3,000 deposit is ____ mystery novels.

Answer 1

Answer:

200 mystery novels.

Explanation:

Giving the following information:

Valerie deposits $3,000 in a bank account that pays an annual nominal interest rate of 15%. At the time of her deposit, a mystery novel is priced at $15.00.

Purchasing power= $3,000/$15= 200 mystery novels.

Answer 2

Answer:200

Explanation: