27 Nominal interest rate (harder) (LO 11 Grose Paterson Bank Ltd is intending to lend money to a client. The loan is to be repaid in a lump sum after 7 years. The bank's required real rate of return is 3 per cent per annum. The bank expects the inflation rate in the coming year to be 8 per cent per annum, falling to 5 per cent per annum the following year and 4 per cent per annum thereafter. What annual interest rate should the bank sete 28 Real annual rate of return (LO 1] In Xanadu, the consumer price index (CPI) stood at 147.6 on 1 January 2010. On that date, SBF Ltd invested soon far var man interactuar ===== si . 1 loa aaaaaanh14 11. DI