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Explanation:
Answer:
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Answer:
8.66%
Explanation:
The calculation for the real rate of return is displayed below:
Real rate of return = {(1 + nominal rate of return) ÷ (1 + inflation rate)} - 1
= {(1 + 11.65%) ÷ (1 + 2.75%)} - 1
= {(1.1165) ÷ (1.0275)} - 1
= 1.086 - 1
= 0.0866 or 8.66%
By applying the formula where the numerator is the nominal rate of return and the denominator is the inflation rate