Problemimagine you borrow 500 from your roommate agreeing, Ask an Expert

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Problem:

Imagine you borrow $500 from your roommate, agreeing to pay her back $500 plus 10 percent nominal interest in one year. Assume inflation over the life of the contract is expected to be 3.50 percent.

Required:

Question 1: What is the total dollar amount you will have to pay her back in a year? What percentage of the interest payment is the result of the real rate of interest? Explain comprehensively and show all workings.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147045

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