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The nominal rate of interest is 10% and the rate of inflation is 5%. A single deposit is invested for 20 years. Let A denote
The nominal rate of interest is 10% and the rate of inflation is 5%. A single deposit is invested for 20 years. Let A denote the value of the investment at the end of 10 years, with the rate of inflation accounted for in the calculation. Let B denote the value of the investment at the end of 10 years computed at the real rate of interest. Find the ratio of A/B Please show your work and any calculations needed.
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