Ask Question
10 June, 08:34

If the nominal interest rate is 6 percent and the rate of inflation is 10 percent, then the real interest rate is A. - 16 percent. B. 4 percent. C. - 4 percent. D. 16 percent.

+3
Answers (1)
  1. 10 June, 11:12
    0
    Answer: C. - 4 percent

    Step-by-step explanation:

    Nominal interest rate is the interest rate before taking inflation into account.

    Real interest rate takes the inflation rate into account.

    The equation that links all three values is

    nominal rate - inflation rate = real rate

    6 - 10 = - 4

    -4 percent
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “If the nominal interest rate is 6 percent and the rate of inflation is 10 percent, then the real interest rate is A. - 16 percent. B. 4 ...” in 📙 Mathematics if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers