Answer:
nominal interest rate= 0.2= 22%
Explanation:
Giving the following information:
Inflation rate= 10%
Real interest rate= 12%
The real interest rate is the result of deducting from the nominal interest rate the inflation rate. Inflation has the opposite effect than interest.
Real interest rate= nominal interest rate - inflation rate
nominal interest rate= real interest rate + inflation rate
nominal interest rate= 0.12 + 0.10
nominal interest rate= 0.2= 22%
