carissamay2001 carissamay2001
  • 06-11-2020
  • Business
contestada

Suppose the interest rate on your car loan is 19.00% and the inflation rate is 18.00%. Calculate the real interest rate

Respuesta :

Samawati
Samawati Samawati
  • 06-11-2020

Answer:

1%

Explanation:

The real interest rate is the interest rate adjusted for inflation. It is the rate after accounting for inflation. The real interest rate is the difference between the inflation rate from the quoted(nominal )interest rate.

real interest rate = quoted interest rate - inflation rate

=19% - 18%

=1%

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