Respuesta :
The real interest rate tells you how fast the purchasing power of your bank account rises over time.
What is meant by the real interest rate?
- When a borrower pays back a loan with interest, the lender obtains a gain in purchasing power that is expressed as a percentage.
- In the previous illustration, the lender made $8 on the $100 loan, or 8%.
What is real and nominal interest rate?
- The real rate of a bond or loan is determined by adjusting a real interest rate to account for the impacts of inflation.
- The interest rate before accounting for inflation is referred to as a nominal interest rate.
Why real interest rate is important?
- Real interest rates are the main concern of economists.
- Investors may be forced to take on greater risk or withdraw entirely depending on the real rate.
- Without ever taking a dollar, it can drain your savings.
- Every central bank in the world has it on their radar.
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