Nominal interest rate

Good evening sir? have a nice supper?

Country X uses the dollar as its currency and country Y uses the dinar.

Country X’s expected inflation rate is 5% per year, compared to 2% per year in country Y.
Country Y’s nominal interest rate is 4% per year and the current spot exchange rate between the two countries is 1.5 dinar per $1.

the this true that Country X’s nominal interest rate is 7.06% per year?

The answer is “YES”

In answer sheet working,

(1.04*1.05/1.02)-1=7.06%.

In my opinion,
the only thing I know is the formula “(1+N)=(1+R)(1+I)” and based on this, I accumulate all information from the question, then I made this one,”(1+N)=(1+R)(1+0.05)”
I don’t understand why they use 2 % inflation and 4% nominal interest of Y to get X’s nominal interest. What am I missing? Respectable John.

Sir, you always emphasize for me to listen to your lectures, but surprisingly,
I listened to all the lectures you uploaded and even print every question made by you
and solved them. However, the only one problem left is that i’m not good at listening every single English pronunciation. I wrote down all your words and everything important
even made arranged files, but i often miss some parts between your lectures going on.

I did all you ask me 🙂 don’t worry. I’m just dull and slow-moving student who is doing my best to be an accountant.