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Connect × \\ M MLK Holiday-jwilson14 × \\ L Recent-Google Drive × \\ Untitled docurment-Go x \\ e Search Textbook Solutio , C0 https://newconnect.mheducation.com/flow/connect.html Apps D PowerTeacherMisc D AP GovernmentSt co D Work l Schedule Access Gmail % Mustang Public Schc D MACU Music e Final Cut Pro X102E D ASOIAF Human Geo #general 99 Talk Simple Team C D Library Chapter 5 Problems Help Save & Exit Submit Saved Check my work 5 An investment offers a total return of 18 percent over the coming year. Alan Wingspan thinks the total real return on this investment will be only 14 percent. 10 points What does Alan believe the inflation rate will be over the next year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Inflation rate eBook Print References Mc Graw Hill Prev 5of 6 … Next Education

Solution

Using Fisher equation, (1 + R) = (1 + r)(1 + h) ((1+0.18)/(1+0.14))-1= 3.51% Inflation rate = 3.51%