Final answer:
The premium added to a real rate of interest to determine a nominal interest rate can be found by adding the rate of inflation to the real interest rate.
Step-by-step explanation:
The premium added to a real rate of interest to determine a nominal interest rate can be found by adding the rate of inflation to the real interest rate. The real interest rate is the nominal interest rate minus the rate of inflation.
For example, if the real interest rate is 4% and the rate of inflation is 2%, the nominal interest rate would be 6% (4% + 2% = 6%).
Using this formula, you can determine the nominal interest rate by adding the rate of inflation to the real interest rate.