Inflation, nominal interest rates, and real rates. The Republic of New South Brazillia, a small, developing island country in South Central America, is experiencing a very high inflation rate at this time. The annual inflation rate is 40%. If the real rate of interest is 2.1%, what nominal interest rates must the residents of New South Brazillia get to stay ahead of inflation and still have a reward for waiting? Use the approximate nominal interest rate equation and the true nominal interest rate equation to determine the rates