Determinants of Interest Rates The real risk-free rate is 4%. Inflation is expected to be 4% this year, 5% next year, and then 4.5% thereafter. The maturity risk premium is estimated to be 0.0006 * (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security? Do not round intermediate calculations. Round your answer to two decimal places.
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