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UkoKoshka [18]
3 years ago
13

If Treasury bills are currently paying 5.2 percent and the inflation rate is 2.7 percent, what is the approximate real rate of i

nterest?
Business
1 answer:
Alexxandr [17]3 years ago
3 0

Answer:

2.43 %

Explanation :

Real Interest rate =  (1 + nominal rate) / (1 + inflation rate) - 1

therefore,

Real Interest rate =  1.052 / 1.027 - 1

                              = 2.43 %

the approximate real rate of interest is 2.43 %

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