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The Republic of New South Brazillia, a small, developing island country in South Central America, is experiencing a very high inflation rate at this time.
The Republic of New South Brazillia, a small, developing island country in South Central America, is experiencing a very high inflation rate at this time. The annual inflation rate is32%. If the real rate of interest is 1.5%, what nominal interest rates must the residents of New South Brazillia get to stay ahead of inflation and still have a reward for waiting? Use the approximate nominal interest rate equation and the true nominal interest rate equation to determine the rates.
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