Nominal Interest Rate

Posted in Finance, Accounting and Economics Terms, Total Reads: 1084
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Definition: Nominal Interest Rate

Nominal interest may be defined as the rate of interest that is got before taking inflation into account. Nominal inflation rate is taken into account to check the effect of something on the other under controlled conditions.

To convert the nominal rate of interest into real interest rate, inflation and risk premium needs to be added to same.

 

 

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