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30 October, 21:58

If the real interest rate is 3.00% per year and the expected inflation rate is 2.40%, what is the nominal interest rate according to the Fisher equation

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  1. 30 October, 22:23
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    5.47%

    Explanation:

    Fisher equation:

    1 + real interest rate = (1+nominal interest rate) / (1+Inflation rate)

    1+0.03 = (1 + Nominal interest rate) / (1+0.024)

    --> nominal interest rate = 5.47%
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