Question

Suppose a 30-year fixed-rate mortgage loan was issued at a nominal interest rate of 5.5% when the expected inflation rate was 2.5%. Eight years later, the actual inflation rate was 4%. After eight years, the real interest rate was _____ and _____ benefited from the actual inflation rate being higher than expected.

Answer 1

7.5 and people will benefit

Step-by-step explanation:

the more the inflation goes high the more the interest rate move forward and values high