Answer:
10.87%
Explanation:
real rate of return = [(1 + nominal rate of return) / (1 + inflation rate)] - 1
- real rate of return = 4.5%
- inflation rate = 6.1%
1 + 4.5% = [(1 + nominal rate of return) / (1 + 6.1%)]
1.045 x 1.061 = 1 + nominal rate of return
1.108745 = 1 + nominal rate of return
0.108745 = nominal rate of return
