Question

Calculate real rate if you have nominal rate is 12% and inflation rate is 7% Enter the answer in percentage format to two decimal place without the % sign -> 9.30 and not 9.3% or .093)

Answer 1

Answer: 5.00

Step-by-step explanation:

The real interest rate is the difference between the nominal interest and the inflation rate.

Real interest rate will be:

= Nominal interest rate − Inflation rate.

= 12% - 7%

= 5.00

Therefore, the real Interest rate is 5.00.