Question

If the nominal interest rate is 4.7% and the inflation rate is 3.4%, what is the real interest rate?

Answer 1

1.3%

Step-by-step explanation:

The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate.

real interest rate=nominal interest rate-inflation rate

nominal interest rate=4.7%

inflation rate= 3.4%

real interest rate=4.7%-3.4%

real interest rate=1.3%

According to this, the answer is that the real interest rate is 1.3%.