The real interest rate is 3.0% and the inflation rate is 5.0%.What is the nominal interest rate?
A)3.00%
B)5.00%
C)8.15%
D)2.00%

Question

Quizplus · Accepted Answer

The nominal interest rate can be calculated by adding the real interest rate and inflation rate. Nominal interest rate = Real interest rate + Inflation rate, thus Nominal interest rate = 3.0% + 5.0% = 8.0%. Therefore, the closest answer from the options is C, which is 8.15%.

The Real Interest Rate Is 3