If the nominal interest rate is 5% in 2019, what is the real interest rate using...

If the nominal interest rate is 5% in 2019, what is the real interest rate using the inflation rate between 2018 and 2019?

Expert Solution

The inflation between 2018 and 2019 in US was 2.3%

Using the formula,

real interest rate = nominal interest rate - inflation

Putting values from the question, we get:

real interest rate = 5 - 2.3 = 2.7%

Rahul Sunny answered 2 years ago

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