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Provide a detailed,step-by-step mechanism for the reaction shown below.
Nominal Interest Rate
The interest rate expressed in terms of annual amounts currently charged for interest and not adjusted for inflation.
Real Interest Rate
The interest rate expressed in dollars of constant value (adjusted for inflation) and equal to the nominal interest rate minus the expected rate of inflation.
Interest
The cost of borrowing money or the return earned on investments, typically expressed as a percentage.
Borrower
An individual, corporation, or other entity that receives funds from another party under the condition of returning the funds plus interest or other charges at a later date.
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