initially, kate earns a salary of $400 per year and hubert earns a salary of $200 per year. kate lends hubert $100 for one year at an annual interest rate of 20% with the expectation that the rate of inflation will be 16% during the one-year life of the loan. at the end of the year, hubert makes good on the loan by paying kate $120. consider how the loan repayment affects kate and hubert under the following scenarios. scenario 1: suppose all prices and salaries rise by 16% (as expected) over the course of the year. in the following table, find kate's and hubert's new salaries after the 16% increase, and then calculate the $120 payment as a percentage of their new salaries. (hint: remember that kate's salary is her income from work and that it does not include the loan payment from hubert.)
