question archive Treasury bills are currently paying 6 percent and the inflation rate is 3
Treasury bills are currently paying 6 percent and the inflation rate is 3
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Treasury bills are currently paying 6 percent and the inflation rate is 3.10 percent. |
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What is the approximate real rate of interest? (Round your answer to 2 decimal places. (e.g., 32.16)) ALSO..
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Answer:
approximate real rate = nominal - iflation = 6-3.1 = 2.9%
real rate = (nominal-inflation)/(1+inflation) = (.06-.031)/(1.031) = 2.81%
