Problem $7-14$ Nominal and Real Returns $[$LO$4]$

An investment offers a total return of $16$ percent over the coming year. Janice Yellen

thinks the total real return on this investment will be only $12$ percent.

What does Janice believe the inflation rate will be over the next year? $($Do not round

Intermediate calculations and enter your answer as a percent rounded to $2$ decimal

places, e$.$g$.,32\mathrm{.}16.)$

Inflation rate