Question

1. Getty Markets has bonds outstanding that have a real return of 3.08 percent. The current rate of inflation is 3.1 percent. What is the nominal rate of return on these bonds?

6.28% Please show all work typed as I can't see much on mobile.

Answer 1

Nominal rate of return			=	(1+r)*(1+i)			Where,
(1+R)			=	(1+0.0308)*(1+0.0310)			r	real rate of return	=	3.08%
(1+R)			=	1.0628			i	Inflation rate	=	3.10%
R			=	1.0628	-	1	R	Nominal rate of return	=	?
R			=	0.0628
So, Nominal rate of return is 6.28%