If the inflation rate was 2.20% and the nominal interest rate was 5.60% over the last year.

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What was the real rate of interest over the last year?

Disregard cross-product terms; that is, if averaging is required, use the arithmetic average?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Posted Date: Jun 11, 2023 04:50 AM

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If the inflation rate was 2.20% and the nominal interest rate was 5.60% over the last year.

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To calculate the real rate of interest we need to subtract the inflation rate from the nom... View the full answer

Fundamentals of Corporate Finance

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