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If the rate of inflation is 5.4 %​, what nominal interest rate is necessary for you to earn a 2.7 % real interest rate on your​ investment? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

Respuesta :

Answer:

8.2458%

Explanation:

According to Fisher Effect equation:

(1 + nominal interest rate) = (1 + real interest rate) x (1 + expected annual inflation)

1 + nominal interest rate = 1.027 x 1.054

--> Nominal interest rate = 8.2458%

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