Simon borrowed R10 000 from the bank at the end of 2011 at a fixed interest rate of 20%. At the end of 2012, the inflation rate was 25%. Inflation has been ________ to Simon; the real value of his loan plus interest payments changed to ________.

Question

beneficial; R9 600
beneficial; R4 800
beneficial; R8 000
costly; R12 500

Answer 1

costly; R12 500