Question: In 1 9 7 5 1 9 7 5 , interest rates were 7 . 8 5 % 7 . 8 5 % and the

In
19751975,
interest rates were
7.85%7.85%
and the rate of inflation was
12.30%12.30%
in the United States. What was the real interest rate in
19751975?
How would the purchasing power of your savings have changed over the year?

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