Mr. Donkor is considering investing in a 1-year fixed income security. Mr. Donkor is required to pay GHS12,000 to acquire the security. He will receive GHS14,000 as maturity value of the investment in a years time. Expected annual inflation is 11%. Required:

1. Compute the nominal rate of return from the investment.

2. Compute the real rate of return from the investment.

3. Suppose returns from the investment is subject to 8% investment income tax, compute the after-tax nominal rate of return and real rate of return.