$($KA$)$ Suppose you borrow $$20$ from a close friend and promise to pay them back $$25$ in one year. If you expect that inflation will be $10\%$ over the year, what is the real interest rate you are paying on the loan?

$($KA$)$ Suppose you borrow $$20$ from a close friend and promise to pay them back $$25$ in one year. If you expect that inflation will be $10\%$ over the year, what is the real interest rate you are paying on the loan?

$5\%$

$15\%$

$10\%$

$20\%$