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 8% and expected inflation is 8%. What is the real interest rate?

Show solution

8% − 8% = 0%.

Problem 2.

A loan's nominal interest rate is 5% and expected inflation is 6%. What is the real interest rate?

Show solution

5% − 6% = -1%.

Problem 3.

A loan's nominal interest rate is 3% and expected inflation is 7%. What is the real interest rate?

Show solution

3% − 7% = -4%.

Problem 4.

A loan's nominal interest rate is 12% and expected inflation is 3%. What is the real interest rate?

Show solution

12% − 3% = 9%.

Problem 5.

A loan's nominal interest rate is 6% and expected inflation is 1%. What is the real interest rate?

Show solution

6% − 1% = 5%.

Problem 6.

A loan's nominal interest rate is 8% and expected inflation is 1%. What is the real interest rate?

Show solution

8% − 1% = 7%.