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Agatha intends to lend $5000 to be repaid in a lump sum after three years, earning her a real interest rate of 5% pa. She

Agatha intends to lend $5000 to be repaid in a lump sum after three years, earning her a real interest rate of 5% pa. She forecasts that the inflation rate will be 9% pa next year, falling to 6% pa in the following year and 2% pa in the year after that. What is the nominal interest rate that Agatha should require?

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