Sarah wants to make an 8% real return on a loan that she is planning to make, and the expected inflation rate during the period of the loan is 5%. She should charge a nominal interest rate of _________________________.     13%            3%            5%            8%

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter13: Inflation
Section: Chapter Questions
Problem 10SQ
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Sarah wants to make an 8% real return on a loan that she is planning to make, and the expected inflation rate during the period of the loan is 5%. She should charge a nominal interest rate of _________________________. 
  
13%
 
 
 
 
  
3%
 
 
 
 
  
5%
 
 
 
 
  
8%
 
 
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