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Harman [31]
3 years ago
14

If the nominal interest rate is 4. 00% and the rate of inflation is 2. 25%, what is the real interest rate? 1. 75% 4. 50% 6. 25%

9. 0%.
Mathematics
1 answer:
Lapatulllka [165]3 years ago
3 0

Based on the information given the real interest rate is 1.75%.

Using this formula

Real interest rate =Nominal interest rate − Inflation rate

Where:

Nominal interest rate=4.00%

Inflation rate=2.25%

Let plug in the formula

Real interest rate=4.00%-2.25%

Real interest rate=1.75%

Inconclusion the real interest rate is 1.75%.

Learn more about real interest rate here:brainly.com/question/6106690

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