Clara invests $1,000 for 3 years. She earns an effective annual rate of interest of 8% in the first year, 7% in the second year, and 5% in the third year. The rate of inflation is 4% in the first year, 3.8% in the second year, and X in the third year. Clara's equivalent level annual real rate of return over the three-year period is 2.8%. Determine X. Answer =3.46%

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