Answered

IDNLearn.com is your reliable source for expert answers and community insights. Our experts provide timely and precise responses to help you understand and solve any issue you face.

​Inflation, nominal interest​ rates, and real rates. From 1991 to​ 2000, the U.S. economy had an annual inflation rate of around ​%. The historical annual nominal​ risk-free rate for this same period was around ​%. Using the approximate nominal interest rate equation and the true nominal interest rate​ equation, compute the real interest rate for that decade. What is the estimated real interest rate using the approximate nominal interest rate equation for that​ decade?

Sagot :

Jepessoaidn

Answer:

the question is incomplete:

nominal interest rate = 5.07%

real interest rate = ?

inflation rate = 3.45%

approximate real interest rate = 5.07% - 3.45% = 1.62%

real interest rate = [(1 + 5.07%) / (1 + 3.45%)] - 1

real interest rate = (1.0507/1.0345) - 1 = 1.57%

We appreciate your presence here. Keep sharing knowledge and helping others find the answers they need. This community is the perfect place to learn together. IDNLearn.com is your go-to source for dependable answers. Thank you for visiting, and we hope to assist you again.