A man bought a 5% tax-free municipal bond. It cost $1000 and will pay $50 interest each
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A man bought a 5% tax-free municipal bond. It cost $1000 and will pay $50 interest each year for 20 years. The bond will mature at the end of the 20 years and return the original $1000. If there is 2% annual inflation during this period, what rate of return will the investor receive after the effect of inflation has been accounted for?
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