Determining the real rate of interest

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Suppose that the only good you purchase is hamburgers and that at the beginning of the year, the price of a hamburger is $2.00. Suppose you lend $1,000 for one year at an interest rate of 5 percent. At the end of the year, a hamburger costs $2.08. What is the real rate of interest you earned on your loan?

Reference no: EM131023404

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