Answer:
at maturity I will receive 1,155.6
the real return is 7%
the nominal will be 15.56%
Explanation:
As it is indexed it will paid a real rate of 7% adjusted for 8% inflation
[tex]1,000(1+r)(1+\delta)=Amount[/tex]
1,000 x 1.07 x 1.08 = 1,155.6 received at maturity
no know the nominal rate we do:
[tex]\frac{Amount}{Principal}-1[/tex]
[tex]\frac{1,155.6}{1,000}-1[/tex]
nominal = 0.1556 = 15.56%
