If you pay $10,625 annually on a $125,000 loan and the rate of inflation is 3 percent, then the

Name: If you pay $10,625 annually on a $125,000 loan and the rate of inflation is 3 percent, then the
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Quizplus · Accepted Answer

The nominal rate of interest is calculated by dividing the annual payment by the loan amount. Here, $10,625 / $125,000 = 0.085 or 8.5%. The real rate of interest adjusts for inflation, but the question doesn't provide enough information to calculate it directly.

If You Pay $10,625 Annually on a $125,000 Loan and the Rate