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If Two Parties to a Loan Contract Agree That the Lender

Question 7

Multiple Choice

If two parties to a loan contract agree that the lender should earn an 8 percent increase in purchasing power as a result of a loan,and the inflation rate is 5 percent,what is the nominal interest rate?


A) 13 percent
B) 8 percent
C) 5 percent
D) 3 percent
E) 1 percent

Correct Answer:

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