Question

write down the interrelationship between interest rate, effect rate and nominal rate​

Answer 1

Answer:

A real interest rate is adjusted to remove the effects of inflation and gives the real rate of a bond or loan. A nominal interest rate refers to the interest rate before taking inflation into account.

Step-by-step explanation:

Answer 2

ANSWER:

EFFECTIVE INTREST IS THE ONE WHICH CATERS THE COMPOUNDING PERIOD DURING A PAYMENT PLAN. ... THE NOMINAL INTERST RATE IS THE PERIODIC INTREST RATE TIMES THE NUMBER OF PERIODS PER YEAR. FOR EXAMPLE , THE NOMINAL ANUAL INTREST OF 12% BASED ON MONTHLY COMPOUNDING MEANS A 1% INTREST RATE PER MONTH (compounded).