A borrows 5000$ from B with an interest rate of 4%/year. The inflation rate of the following year is 3%/year Using the Fisher Equation as approximate, what is the real value of A repayment on the borrowed date's dollar?
Question
A borrows 5000$ from B with an interest rate of 4%/year. The inflation rate of the following year is 3%/year Using the Fisher Equation as approximate, what is the real value of A repayment on the borrowed date's dollar?
Solution
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