If the nominal interest rate is 13 percent and the anticipated rate of inflation is 8 percent,the real interest rate is
A)13 percent.
B)21 percent.
C)5 percent.
D)-5 percent.

Question

Quizplus · Accepted Answer

The real interest rate is calculated by subtracting the anticipated rate of inflation from the nominal interest rate. Thus, the real interest rate in this case is 13 percent - 8 percent = 5 percent.

If the Nominal Interest Rate Is 13 Percent and the Anticipated