An equipment was purchased two years ago financing for 5 years at 8% interest compounded monthly. The inflation rate for the past two years has been 3% per year and is expected to remain the same for the next 3 years. Compute the real interest rate for this loan.

Question

Quizplus · Accepted Answer

The Answer of An equipment was purchased two years ago financing for 5 years at 8% interest compounded monthly. The inflation rate for the past two years has been 3% per year and is expected to remain the same for the next 3 years. Compute the real interest rate for this loan.

An Equipment Was Purchased Two Years Ago Financing for 5