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Problem 3 Sally lent a friend $ 1 0 , 0 0 0 at 1 5 % interest, compounded annually. The loan will be repaid

Problem

3

Sally lent a friend $

10, 000

15 %

interest, compounded annually. The loan will be repaid in five

equal end

-

-

year payments. Sally expects the inflation rate to be

10 % .

After taking inflation into

account, what rate of return is Sally receiving on the loan, rounded to the nearest tenth of a percent?

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