A bank lends money for a year at an interest rate of 7%, and the inflation...
A bank lends money for a year at an interest rate of 7%, and the inflation rate for that year turns out to be 5%. What is the bank's real rate of return for that year?
Homework Answers
Answer
the real rate of interest =nominal interest rate - inflation
=7-5
=2%
the real interest rate is 2%
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A bank lends money for a year at an interest rate of 7%, and the
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