If the inflation rate is 3% and the nominal interest rate is 8%, what is the real interest rate? Your answer is referred to as the real pre‐tax interest rate.
Based on the Fischer relation,
(1 + Nominal Rate) = (1 + Real Rate) * (1 + Inflation)
(1 + 8%) = (1 + Real rate) * (1 + 3%)
(1 + Real Rate) = 1.08/1.03 = 1.0485
Real Rate = 4.85%
If the inflation rate is 3% and the nominal interest rate is 8%, what is the...
What is the real interest rate if the nominal interest rate is still 8% but inflation is 1%? Does it cost more or less to borrow than when inflation was 3%?
The nominal interest rate is 8 percent and the inflation rate is 3 percent. What is the real interest rate? a. 8 percent b. 2 percent c. 11 percent d. 5 percent
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate?nominal interest rate: = _______ %All else equal, if inflation decreases by 0 %, what will happen to the nominal interest rate?The real interest rate will decrease by 0 %.The nominal interest rate will decrease by 0 %.The nominal interest rate will increase by 0 %.The real interest rate will increase by 0 %.What do economists call the relationship between the nominal interest...
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate? nominal interest rate:
If the nominal interest rate is 7% and the inflation rate is 2%, what is the real interest rate? (Do not round intermediate calculati Round your answer to 2 decimal places.) Real interest rate Next > Prey 2 of 15
If the rate of inflation is 5%, what nominal interest rate is necessary for you to earn a 3% real interest rate on your investment? The nominal interest rate is %. (Round to two decimal places.)
The nominal interest rate is 12%. The inflation rate is 3%. The real interest rate is equal to %.
If a nominal interest rate is 8 percent, and inflation is 8 percent, then the real interest rate is: minus 2 percent. 16 percent. 0 percent. 8 percent.
What is the real interest rate if the nominal interest rate is 8% and the expected inflation rate is10% over the course of a year?
a. What is the relationship between real interest rate, nominal interest rate and inflation rate? b. What are the reasons for very high nominal interest rates in the 1980s? c. Explain ex-ante real rate and ex-post real rate.