Intuition suggests you need to keep the real rate (2.91%) constant, that is, increase the nominal rate to 7% (confirm this). However, this will not be sufficient because the nominal income growth of 7% (column B) has a lower real growth when inflation is higher.

Result: You must increase the real ROR to compensate for a lower growth in real income, ending with a nominal rate of 7.67%.

 LO.1