Question: Simplified formula: Real interest rate = Nominal interest rate - Inflation rate. Exact formula: Nominal interest rate = (1+ Real interest rate)(1+ Inflation rate). The

Simplified formula: Real interest rate = Nominal interest rate - Inflation rate. Exact formula: Nominal interest rate = (1+ Real interest rate)(1+ Inflation rate). The rates are in decimals, not percentages. The exact formula should be used when at least one term is greater than 0.1=10% At the time of big inflation, the inflation rate was 50% per year, and the real interest rate was 2%. What is the fair nominal interest rate? A. 60% B. 53% C. 152% D. 48%

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