What is appropriate contrast rate for one year loan

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Reference no: EM131912416

The following annual inflation rates have been forecast for the next years: year 1: 2.5% Year 2: 3.5% Year 3: 4.0% Year 4: 4.5% Use the average annual inflation rate and a 3.5% real rate to calculate the appropriate contrast rate for a 1-year and a 4-yearloan. What is the appropriate contrast rate for 1 year loan and 4 year loan?

Reference no: EM131912416

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