(Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real rate is 4.5 percent and the expected inflation rate is 7.3 percent?
Nominal rate of interest = (1+ real interest rate)*(1+ Inflation rate) - 1
= (1+0.045)(1+0.073)-1
= 12.1285%
(Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of...
Problem 2-4 (similar to) (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real rate is 3.7 percent and the expected inflation rate is 7.1 percent? The nominal rate of interest is %. (Round to two decimal places.)
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