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marshall27 [118]
2 years ago
8

Assume the nominal interest rate on a 15-year fixed-rate mortgage loan is 5 percent. If the expected inflation rate is 2 percent

, the expected real interest rate is
Business
1 answer:
Oksi-84 [34.3K]2 years ago
7 0

If the expected inflation rate is 2 percent, the expected real interest rate is 3%.

<h3>Expected real interest rate</h3>

Using this formula

Expected real interest rate=Nominal interest rate-Expected inflation rate

Where:

Nominal interest rate=5%

Expected inflation rate=2%

Let plug in the formula

Expected real interest rate=5%-2%

Expected real interest rate=3%

Inconclusion if the expected inflation rate is 2 percent, the expected real interest rate is 3%.

Learn more about expected real interest rate here:brainly.com/question/25456127

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b. an assignee.

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