You borrow $10,000 today at a nominal rate of 5 percent; inf…

Yоu bоrrоw $10,000 todаy аt а nominal rate of 5 percent; inflation for the past 10 years has been exactly 2 percent. Today, inflation instantly rises to 4 percent and stays that way for the duration of your loan. Based on the above information and all else being equal, today