le fisher effect Imation and investment Lara and Hana each earn a real interest rate on their savings account of 5%. However, Lara lives in
le fisher effect Imation and investment Lara and Hana each earn a real interest rate on their savings account of 5%. However, Lara lives in a country with an 8% inflation rate, while Hana lives in a country with a 2% inflation rate. Both countries have a 20% tax on income. Complete the following table: Lara Hana Real Interest Rate 5% 5% Inflation Rate 8% 2% Nominal Interest Rate 13% 7% After-tax nominal interest rate 10.4% 5.6% After-tax real interest rate 2.4% 3.6%
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