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If the nominal interest rate is 8 percent and the inflation rate is 3 percent, then the real interest rate is

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Considering that nominal interest rate is 8% and the inflation rate is 3%, then, real interest rate will equals 3%.

Given Information

Nominal interest rate = 8%

Inflation rate = 3 percent

Real interest rate = Nominal interest rate - Inflation rate

Real interest rate = 8% - 3%

Real interest rate = 5%.

Hence, considering that nominal interest rate is 8% and the inflation rate is 3%, then, real interest rate will equals 3%.

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