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suppose the real intrest rate is 2.5% and the inflation rate is 7% . what is the nominal intrest rate?
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Solved in 4 steps
- You observe a nominal rate of 5.48% at the same time you learn that the inflation rate is 2.68%. What is the real rate, given this information?Suppose the real rate is 3.1 percent and the inflation rate is 4.7 percent. What rate would you expect to see on a Treasury bill?What is the real interest rate given a nominalrate of 8.4%, and an inflationrate of 2.0%
- What would you expect the nominal rate of interest to be if the real rate is 5.3 percent and the expected inflation rate is 2.8 percent?Nominal rates are currently 6.75%, and the estimate of expected inflation is 4.23%. Use the (precise) Fisher relationship to estimate the real rate prevailing in the economy.If your real rate of return is 2% and the inflation rate is 3%, what is the nominal rate of return?
- What is the (exact) nominal return on an investment that earns a real return of 14.7% while inflation is 7.4%? Enter your response, in percent (%), correct to TWO decimal places.What would you expect the nominal rate of interest to be if the real rate is 3.8percent and the expected inflation rate is 6.8 percent? The nominal rate of interest would be ______%. (Round to two decimal places.)The annual inflation rate is expected to be 4.78% and the nominal (annual) interest rate is 5.75%. What is the real interest rate?
- Please answer quickly and correctly Suppose that the general inflation rate is 3% and the real interest rate is 5%. Find the market interest (aka combined) rate (%, to the nearest hundredth).The Fisher equation tells us that the real interest rate approximately equals the nominal rate minus the inflation rate. Suppose the inflation rate increases from 3% to 5%. Does the Fisher equation imply that this increase will result in a fall in the real rate of interest? Explain.If we require a 5% real return and we expect inflation to be 2%, what is the nominal rate of interest?