Suppose the real rate is 1.9%, and the inflation rate is 3.1%. what nominal rate would you expect to see on a treasury bill?

Using the Fisher equation, which shows the exact relationship between nominal interest rates, real interest rates, and inflation is:

The solution would be:

(1 + R) = (1 + r) (1 + h)

R = (1 +.031) (1 +.019) - 1

= (1.031) (1.019) - 1

= 1.050589 - 1

=0.050589 or 5.059%