Question

Drag each tile to the type of interest rate it describes

nominal interest rate
Real Interest Rate
the stated interest rate on an
considers Inflation
does not consider Inflation
reveals purchasing power
account
reflects the actual monetary
can be negative

Answer 1

Nominal Interest Rate: Does not consider inflation provides a sense of purchasing power

Real Interest Rate: It describes the stated interest rate on an account and also considers inflation

Explanation:

Real interest rate can be defined as the Nominal interest rate minus the inflation rate.

Nominal Interest Rate is the interest rate without taking into account the inflation

Answer 2

NOMINAL INTEREST RATE:

1. The stated interest rate on an account.

2. Does not consider inflation.

3. Reflects the actual monetary amount earned

amount earned

REAL INTEREST RATE :

1. Considers inflation.

2. Reveals purchasing power.

3. Can be negative

Explanation:

I literally just took this quiz and got them all correct.