The stated interest rate on a loan is the
A)real interest rate.
B)nominal interest rate.
C)actual inflation rate.
D)expected inflation rate.

Question

Quizplus · Accepted Answer

The stated interest rate on a loan is typically the nominal interest rate, which is the rate quoted by the lender without taking into account inflation or other factors that can affect the true value of the loan. The real interest rate, by contrast, adjusts for inflation and reflects the true cost of borrowing money. The actual and expected inflation rates are not directly related to the stated interest rate on a loan, although they can have an impact on the borrower's ability to repay the loan over time.

The Stated Interest Rate on a Loan Is the