Answer:
Nominal.
Explanation:
Nominal interest rate is the interest rate taken before inflation is accounted for. It is quoted in loans and bonds.
The nominal interest rate is also known as the annualized percentage rate, which is the interest compounded once per year.
The factor that affects nominal interest rate is inflation/deflation. When deflation takes place the nominal interest rate decreases and when inflation occurs the nominal interest rate increases.
Answer:
The correct answer is letter "A": Nominal rate.
Explanation:
An interest rate is the borrowing money cost, calculated as a percentage of the value of the loan. The interest rate is the primary indicator of how much return borrowers are receiving. The default stated interest rate on a loan, called the nominal rate, does not tell the whole story though. Because of inflation, the purchasing power of every dollar lent out to an individual or a business tends to decrease over time.
