Suppose you were borrowing money to buy a car. Which of these situations would you prefer:The interest rate on your car loan is 20 percent and the inflation rate is 19 percent or the interest rate on your car loan is 5 percent and the inflation rate is 2 percent? explain

Answer 1

Bobpursley already posted his answer.

Which do you think is the better deal for you?

Answer 2

The second case since the inflation is the increase in the price level and 2 percent is lower than 19 percent and the interset is also lower so i'll saved more money