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View Full Version : I need help with my finance homework?

Speciaka
Nov 28, 2011, 05:06 PM
What would you expect the nominal rate of interest to be if the real rate is 4% and the expected inflation rate is 7%?
bimbolena
Dec 13, 2011, 02:14 AM
11%

The real rate is the nominal rate minus inflation. So

real=nominal-inflation
gives
nominal=real+inflation=4+7=11

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Lena - [email protected]