If the market interest rate is 9% and the general price inflation rate is 4%, what...

Question

Question

Answer 1

Answer #1

(1+Real Interest Rate)*(1+Inflation Rate) = (1+market Interest Rate)

(1+Real Interest Rate) = 1.09/1.04

Real Interest Rate = 4.8077%

i.e. 4.81

Answer 2

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