Nominal Interest Rate | Explained with Calculation Examples
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Nominal Interest Rate | Explained with Calculation Examples
In this lesson, we explain what the nominal interest rate is and how it is calculated using the nominal interest rate (APR) formula. We go through examples of calculating the nominal interest rate from an effective interest rate and how to go from nominal interest rate with different compounding to another nominal interest rate (APR). Effective ...
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Suppose the tax rate is 30%.For each of the inflation rate and before-tax nominal interest rate combinations, complete the following table by computing the before-tax real interest rate, the after-tax nominal interest rate, and the after-tax real interest rate.Inflation Rate(Percent)Before TaxAfter TaxNominal Interest Rate(Percent)Real Interest Rate(Percent)Nominal Interest Rate(Percent)Real Interest Rate(Percent)4103826
Suppose the tax rate is 30%.For each of the inflation rate and before-tax nominal interest rate combinations, complete the following table by computing the before-tax real interest rate, the after-tax nominal interest rate, and the after-tax real interest rate.Inflation Rate(Percent)Before TaxAfter TaxNominal Interest Rate(Percent)Real Interest Rate(Percent)Nominal Interest Rate(Percent)Real Interest Rate(Percent)4103826
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