Business, 12.03.2021 19:00, penelopymorales24

You take out student loans to help pay for your degree at a 5% annual interest rate. Assume the bank expected inflation to average 3% per year. a. What real interest rate did the bank expect to earn from your loan? The bank expected to earn % per year. b. What happens if inflation is actually 5% per year? If inflation is actually 5%, then the bank will earn % per year. c. If inflation is higher than expected, then better off. If it is lower than expected, then better off.

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You take out student loans to help pay for your degree at a 5% annual interest rate. Assume the bank...