29. The “prime” interest rate is the rate that banks charge their best customers. Based on the nominal interest rates and inflation rates in Table 5.10, in which of the years would it have been best to be a lender?

Based on the nominal interest rates and inflation rates in Table 5.10, in which of the years given would it have been best to be a borrower?

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Year Prime Interest Rate Inflation Rate 1970 7.9% 5.7% 1974 10.8% 11.0% 1978 9.1% 7.6% 1981 18.9% 10.3% Table 5.10