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    Speciaka's Avatar
    Speciaka Posts: 1, Reputation: 1
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    #1

    Nov 28, 2011, 05:06 PM
    I need help with my finance homework?
    What would you expect the nominal rate of interest to be if the real rate is 4% and the expected inflation rate is 7%?
    bimbolena's Avatar
    bimbolena Posts: 2, Reputation: 2
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    #2

    Dec 13, 2011, 02:14 AM
    11%

    The real rate is the nominal rate minus inflation. So

    real=nominal-inflation
    gives
    nominal=real+inflation=4+7=11

    Love

    Lena - [email protected]


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