If the rate of inflation is 5.4%​, what nominal interest rate is necessary for you to earn a 3% real interest rate on your​ investment?​(Note: Be careful not to round any intermediate steps less than six decimal​ places.) The nominal interest rate is_______________ ​ (Round to two decimal​ places.)

Q: (Inflation and interest rates​) What would you expect the nominal rate of interest to be if the real…

A: The formula to calculate nominal rate of interest is: (1 + Nominal rate of return) = (1 + Real rate…

Q: If Treasury bills are currently paying 5.75 percent and the inflation rate is 2.8 percent, what is…

A: Data given: Treasury bill rate = 6% Inflation rate= 2.3%   Required: i) Approximate real rate ii)…

Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of…

A: The nominal interest rate is usually greater than the inflation rate by the amount of the expected…

Q: ​(Inflation and interest rates​) What would you expect the nominal rate of interest to be if the…

A: The nominal rate of interest is the rate that includes the inflation effect in the interest rate.…

Q: (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real…

A: To calculate the nominal rate of interest we will use the below formulaNominal rate of return =…

Q: If there is a deflation rate of 2% and your account is earning a nominal interest rate of 1.75%,…

A: Deflation rate (d) = 2% Nominal interest rate (r) = 1.75%

Q: what should the nominal rate of interest​ be?

A: Nominal interest rate (NIR) refers to a interest rate which an investor is expect from his…

Q: (Inflation and interest rates) Assume the expected inflation rate is 4.1 percent. If the current…

A: A financial product's declared or marketed interest rate, such as that on a loan, bond, or savings…

Q: Please answer quickly and correctly Suppose that the general inflation rate is 3% and the real…

A: As opposed to real interest rates and effective interest rates, nominal interest rates are the…

Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of…

A: Nominal rate is the rate which has been stated in the loan documents or the financing arrangement…

Q: i>0 is the effective annual interest rate, and r>0 is the annual inflation rate (with i>r). If i…

A: We have to find out if the real rate of return doubles, if nominal rate and inflation both doubles.

Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of…

A: Nominal rate is the rate which has been stated in the loan documents or the financing arrangement…

Q: What would you expect the nominal rate of interest to be if the real rate is 5 percent and the…

A: We require to compute the nominal rate of interest in this question.

Q: If the rate of inflation is 4.6%, what nominal interest rate is necessary for you to earn a 2.2%…

A: The nominal interest rate is an interest rate before considering the inflation rate. The formula for…

Q: The risk-free rate is 2.9%, and expected inflation is 2.1%. If inflation expectations change such…

A: Risk free rate:The risk-free rate is crucial in finance and economics as it helps determine the…

Q: klp.1

A: The objective of this question is to find the nominal interest rate necessary to earn a specific…

Q: The real risk-free rate is 2.35%. Inflation is expected to be 3.35% this year, 4.75% next year, and…

A: To calculate the yield on a 7-year Treasury note, we need to consider the components involved: the…

Q: What is the yield on a 7-year Treasury note

A: SOLUTION:- r = Real risk-free rate + Inflation premium + Default risk premium + Liquidity premium+…

Q: You want to earn a real rate of return of 6.50% at a time when the inflation rate is 3.25%. What is…

A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

Q: You know that the stated rate of return is not what you really earned. If the inflation rate last…

A: The inflation rate refers to the rate at which the value of the currency decreases over time and the…

Q: suppose the real intrest rate is 2.5% and the inflation rate is 7% . what is the nominal intrest…

A: Solution:Nominal interest rate means rate of return after adjustment of inflation rate in the real…

Q: The nominal rate of interest would be %.

A: We can define real interest rate as those interest rates which have been adjusted for the inflation…

Q: If the rate of inflation is 5.8%, what nominal interest rate is necessary for you to eam a 3.4% real…

A: Data given: Rate of inflation (i)=5.8% Real interest rate (r) =3.4% Nominal interest rate (N)=?…

Q: What would you expect the nominal rate of interest to be if the real rate is 5.3 percent and the…

A: Nominal Interest Rate: It refers to the rate of interest that does take into consideration the…

Q: Suppose that the 90-day forward rate is $1.17/€, the current spot rate is $1.20/€, and you expect…

A: The difference between the forward rate and the future sot rate shows the profit or loss of the…

Q: The rate of inflation is 4.1%. What nominal rate of return will you need in order to achieve a 5.0%…

A: Nominal Rate of Return = {(1 + Real Interest Rate)} x {(1 + Inflation Rate)} - 1

Q: If the rate of inflation is 4.8%, what nominal interest rate is necessary for you to earn a 2.2%…

A: Inflation rate = 4.8% Real rate = 2.2%

Q: The real interest rate is 5% and the inflation rate is 3%. What is the nominal interest rate? Round…

A: nominal interest rate = real interest rate + inflation rate

Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nom to be if…

A: The nominal interest rate is usually greater than the inflation rate by the amount of the expected…

Q: The annual inflation rate is expected to be 4.78% and the nominal (annual) interest rate is 5.75%.…

A: Inflation rate (π) =4.78% Nominal rate of interest (i)=5.75%. Using Fischer equation, real interest…

Q: If inflation is anticipated to be 6 percent during the next year, while the real rate of interest…

A: The nominal return is the sum of the inflation rate and the real rate that we can calculate using…

Q: What will the money rate of interest have to be at a 6% inflation rate to entice people to keep the…

A: given, real rate = 5% inflation= 6%

Q: The real risk-free rate is 2.08%, inflation is expected to be 6.17% this year, and the maturity risk…

A: Real risk free rate = 2.08% Inflation rate = 6.17% Maturity risk premium = 0%

Q: Honesty Company would like to borrow funds from Integrity Company. The risk-free rate is 5% and the…

A: Current inflation rate= 1% Inflation rate in following year = 2% Risk free rate = 5% Margin relevant…

Q: 5a. Consider the data in the table below. The inflation rate is 6% and the before-tax market…

A: Real interest rate refers to the rate that defines the preference on the basis of time for the…

Q: Suppose the real rate is 7 percent and the inflation rate is 2.6 percent. What rate would you expect…

A: concept. (1+Rf)  = (1 + RR) * (1+IR) where , Rf = risk free rate RR =real rate IR = inflation rate

Q: Suppose that you want to take out a loan and that your local bank wants to charge you an annual real…

A: Compute the nominal interest rate: Nominal interest rate is calculated by using following formula:

Q: What is the nominal rate of return on an investment if the real rate of return is 3.41% and the…

A: Real Rate of Return = 3.41%Inflation Rate = 2.50%

Q: Suppose that actual inflation is 3 percent, the Fed's inflation target is 2.5 percentage points, and…

A: Working Note #1 Calculation of inflation gap: Actual inflation=3% Target inflation = 2.5% Inflation…

Q: The expected inflation rate is 26.5%. If the current real rate of interest is 21%, what should the…

A: Nominal rate of interest is calculated using following equation Nominal interest rate = [(1+Real…

Q: Suppose the real rate is 2.32 percent and the inflation rate is 2.68 percent. What rate (in percent)…

A: Real rate of return = 2.32% or 0.0232Inflation rate = 2.68% or 0.0268We need to calculate the…

Q: The real risk-free rate is 1.95%. Inflation is expected to be 2.95% this year, 4.25% next year, and…

A: Treasury notes are issued by the federal central bank and are quite risk The rate of return depends…

Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of…

A: Nominal interest rate is the percentage increase in money paid to lender for use of borrowed money.

Q: How long will it take for $570 to grow to $2,700 at the following interest rates? 5.7 9.7 17.7

A: When we make an investment or deposit an amount today it grows with passage of time. This is because…

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.