The nominal interest rate tells you
A)how fast the number of dollars in your bank account rises over time.
B)how fast the purchasing power of your bank account rises over time.
C)the number of dollars in your bank account today.
D)the purchasing power of your bank account today.

Question

Quizplus · Accepted Answer

The nominal interest rate indicates the rate at which the amount of money in your bank account increases over time, without adjusting for inflation. It does not account for changes in purchasing power.

The Nominal Interest Rate Tells You