If the nominal interest rate is 12 per cent and the rate of inflation is 7 per cent, then the real rate of interest is 5 per cent.

Name: If the nominal interest rate is 12 per cent and the rate of inflation is 7 per cent, then the real rate of interest is 5 per cent.
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The real rate of interest is calculated by subtracting the rate of inflation from the nominal interest rate. Therefore, 12% - 7% = 5%.

If the Nominal Interest Rate Is 12 Per Cent and the Rate