For each of the following situations,determine the amount of the allowable deduction.Be sure to show any necessary calculations and provide explanations of how you determined the deductible amount.
Definitions:
Nominal Interest Rate
The stated interest rate on a loan or investment, not adjusted for inflation.
Inflation Rate
The rate expressed in percentage terms by which the overall price level of goods and services increases, leading to a decrease in purchasing power.
Real Rate of Interest
The interest rate adjusted for inflation, reflecting the true cost of borrowing and the real yield to lenders.
Investment-Demand
The desire or willingness to allocate resources towards investment goods that are expected to yield returns in the future.
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