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Suppose the interest rate on your car loan is 19.00% and the inflation rate is 18.00%. Calculate the real interest rate

asked
User Malady
by
7.6k points

1 Answer

5 votes

Answer:

1%

Step-by-step explanation:

The real interest rate is the interest rate adjusted for inflation. It is the rate after accounting for inflation. The real interest rate is the difference between the inflation rate from the quoted(nominal )interest rate.

real interest rate = quoted interest rate - inflation rate

=19% - 18%

=1%

answered
User Olexiy Burov
by
7.8k points

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