If the nominal interest rate is 7.5 percent and the inflation rate is 4.0 percent, what...

Question

Question

If the nominal interest rate is 7.5 percent and the inflation rate is 4.0 percent, what is the real interest rate?

Answer 1

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Answer #1

Ans 3.5 percent

Real interest rate = Nominal interest rate - inflation rate

= 7.5% - 4%

= 3.5%

Answer 2

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