If the nominal interest rate per year is 10% and the inflation rate is 4%, what is the real rate of return? A) 4.0% B) 5.8% C) 10% D) 14.05
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So, in this case, it would be 10% - 4% = 6%. However, this option is not given in the choices. The real rate of return can also be calculated using the formula: (1 + nominal rate)/(1 + inflation rate) - 1. Show more…
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