Determine the nominal rate of interest, if the real rate is 6% and the inflation rate is 1.85%.
A)8.84%
B)7.96%
C)6.75%
D)3.24%

Name: Determine the nominal rate of interest, if the real rate is 6% and the inflation rate is 1.85%. A)8.84% B)7.96% C)6.75% D)3.24%
Brand: Quizplus
Rating: 4.8 (36 reviews)

Question

Quizplus · Accepted Answer

The nominal rate of interest can be calculated using the Fisher equation: nominal rate = real rate + inflation rate + (real rate * inflation rate). Plugging in the given values: nominal rate = 6% + 1.85% + (6% * 1.85%) = 7.96%.

Determine the Nominal Rate of Interest, If the Real Rate