Question

Treasury bills are currently paying 7 percent and the inflation rate is 2.7 percent. What is the approximate real rate of interest

Answer 1

the approximate real rate of interest is 4.3%

Step-by-step explanation:

The computation of the approximate real rate of interest is as follows;

As we know that

The Approximate Real rate of interest is

= Treasury bills rate - Inflation rate

= 7% - 2.7%

= 4.3%

Hence, the approximate real rate of interest is 4.3%

It could be come by applying the above formula so that the correct percentage could arrive