Suppose that the economywide expected future marginal product of capital is

MPK^F= 20 - 0.02K, where Kis the future capital stock.

The depreciation rate of capital,d, is 20% per period.

The current capital stock is 900 units of capital. The price of a unit of capital is 1 unit of output. Firms pay taxes equal to 15% of their output.

The consumption function in the economy isC = 100 + 0.5Y - 200r,

whereCis consumption,Yis output, andris the real interest rate.

Government purchases equal 200, and full-employment output is 1000.

What is the equilibrium real interest rate? Round your answer to at least 3 decimal places. (E.g. 12.345% should be entered as 0.123)