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Jimmy borrowed $50,000 to add a room to his house. He financed the loan over 3 years at 7 percent per year. He expects a
Jimmy borrowed $50,000 to add a room to his house. He financed the loan over 3 years at 7 percent per year. He expects a 2 percent inflation rate each year for the next 3 years. It follows that he expects to pay an annual real interest rate of a. 4.5 percent. b. 5 percent. c. 8 percent. d. 9 percent
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