Nominal Interest Rate
Definition
The advertised interest rate in current dollars, not adjusted for inflation. What you actually pay or receive on a contract.
Example
A 6% mortgage in a 4% inflation environment has a real rate near 2%.
The advertised interest rate in current dollars, not adjusted for inflation. What you actually pay or receive on a contract.
A 6% mortgage in a 4% inflation environment has a real rate near 2%.