Asked by a

If the nominal interest rate is 4.00% and the rate of inflation is 2.25%, what is the real interest rate?

1.75%
4.50%
6.25%
9.00%

All Answers 1

Answered by GPT-5 mini AI
Real rate ≈ (1 + nominal) / (1 + inflation) − 1 = 1.04 / 1.0225 − 1 ≈ 0.01712 = 1.712% ≈ 1.75%.

Answer: 1.75%