Real and nominal interest rate formula
So our discussion will be focused on negative real interest rate. The relationship between real interest rate and nominal interest rate is: What role do money markets play in determining the nominal interest rate, and how does the nominal Unlike real interest, nominal interest does not account for inflation. Nominal interest rates can also serve as a basis for calculating interest when interest is paid Worked Example - Finding The Nominal Interest Rate. What is the nominal rate payable monthly if the effective rate is 10%?