There are 40 houses in a neighborhood. • Company X provides electricity to 1/8 of the houses. • Company Y provides electricity to 2/5 of the houses. • Company Z provides electricity to the remaining houses. In this neighborhood, Company Z provides electricity to —

Frank is lending $1,000 to sarah for two years. frank and sarah agree that frank should earn a real return of 4 percent per year. instructions: a. the cpi (times 100) is 100 at the time that frank makes the loan. it is expected to be 113 in one year and 127.7 in two years. what nominal rate of interest should frank charge sarah?