Financial accounting help. If the real rate is 3% and inflation rate is 4.7% what rate would a treasury bill pay?

One arrangement of the relationship between the nominal rate n, the expected inflation rate i, and the real rate r, is given by



You have r and i, so just solve for n.

The correct answer is:

(1+R)=(1+r) x (1+h) where h is inflation
(1+R)=(1.03) x (1.047)
R= 0.0784=7.84%