True or false. The interest rate advertised and charged by banks to consumers (like if you...
True or false. The interest rate advertised and charged by banks to consumers (like if you get a car loan or a mortgage) is the real interest rate (not the nominal interest rate).
Homework Answers
Ans: False
Explanation:
The interest rate advertised and charged by banks to consumers is the nominal interest rate.
Real interest = Nominal interest rate - Rate of inflation.
So real interest considers inflation rate whereas nominal interest does not.
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