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January 20th, 2014, 08:04 PM   #1
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nominal rate of interest help

What would you expect the nominal rate of interest be if the real rate is 4% and the expected inflation rate is 7%?

I did n=4 I=7
(1+.04)= (1+.07)+(1+r)
1.04/1.07 - 1 = -2.80. Is that correct?
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January 21st, 2014, 07:46 AM   #2
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Re: nominal rate of interest help

Looks good to me.
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