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If the nominal rate of interest is 13.75% and the real rate of interest is 7.05%, What is the expected rate of inflation? (Round to Two Decimal Places)

Jul 2nd, 2015

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nominal interest rate = 13.75% 

real rate of interest  = 7.05%

Expected rate of inflation =?

According to Fisher equation:

  Expected inflation rate = nominal interest rate - real interest rate

                                       = 13.75% - 7.05%

   Expected inflation rate  = 6.7%


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Jul 2nd, 2015

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