Real interest rate practice problems

Macroeconomics Unit 4. Try each one, then open the worked solution. The Credit Sprint app generates unlimited new versions with fresh numbers.

Problem 1.

A loan's nominal interest rate is 9% and expected inflation is 2%. What is the real interest rate?

Show solution

9% − 2% = 7%.

Problem 2.

A loan's nominal interest rate is 6% and expected inflation is 3%. What is the real interest rate?

Show solution

6% − 3% = 3%.

Problem 3.

A loan's nominal interest rate is 2% and expected inflation is 2%. What is the real interest rate?

Show solution

2% − 2% = 0%.

Problem 4.

A loan's nominal interest rate is 2% and expected inflation is 6%. What is the real interest rate?

Show solution

2% − 6% = -4%.

Problem 5.

A loan's nominal interest rate is 10% and expected inflation is 8%. What is the real interest rate?

Show solution

10% − 8% = 2%.

Problem 6.

A loan's nominal interest rate is 4% and expected inflation is 1%. What is the real interest rate?

Show solution

4% − 1% = 3%.