In 2007, the interest rate banks in France charge each other for loans was 4.86 percent. The inflation rate in France in 2007 was 2.8 percent. The real interest rate in France is
A) 7.62 percent
B) 2.06 percent.
C) 0.58 percent.
D) 13.6 percent.

Question

Quizplus · Accepted Answer

The real interest rate can be calculated using the formula: real interest rate = nominal interest rate - inflation rate. Therefore, 4.86% - 2.8% = 2.06%.

In 2007, the Interest Rate Banks in France Charge Each