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Suppose that you want to take out a loan at a bank that wants to charge you an annual real interest rate equal to 5

Suppose that you want to take out a loan at a bank that wants to charge you an
annual real interest rate equal to 5%. Assuming that the expected rate of inflation during the life of the loan is 2%, what will be the nominal interest rate that the bank will charge you? If the real inflation was 3% instead of the expected 2%,what was the actual real interest rate on this loan?

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