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Topic: Nominal interest rate


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In the News (Fri 11 Dec 09)

  
  Nominal interest rate - Wikipedia, the free encyclopedia
A nominal interest rate is a rate as stated.
As a result, this nominal interest rate is not equivalent to an effective interest rate of 6.16%.
If the nominal interest rate is adjusted to ignore this change, what remains is called the real interest rate.
en.wikipedia.org /wiki/Nominal_interest_rate   (186 words)

  
 Nominal interest rate -- Facts, Info, and Encyclopedia article   (Site not responding. Last check: 2007-11-07)
In fact it is the sum of the expected real interest rate plus the expected inflation rate over the duration of the loan.
Nominal interest rate is not an interest rate at all, but the sum of two different concepts in economics.
As a result, this nominal interest rate is equivalent to an (Click link for more info and facts about effective interest rate) effective interest rate of 6.16%.
www.absoluteastronomy.com /encyclopedia/n/no/nominal_interest_rate.htm   (400 words)

  
 Interest rate - Wikipedia, the free encyclopedia
Because money is a resource or commodity, as well as a means of exchange, the interest rate is the price paid for the use of money for a period of time.
One type of interest rate is the yield on a bond.
The real interest rate, which measures the purchasing power of interest receipts, is calculated by adjusting the actual rate charged (known as the money or nominal interest rate) to take inflation into account.
en.wikipedia.org /wiki/Interest_rate   (544 words)

  
 Trust fund interest rates
Special-issue investments bear interest rates determined monthly by a formula, which became effective with the interest rate for securities issued in October 1960.
Interest on special-issue investments is paid semi-annually, at the end of June and the end of December.
The effective rates in the graph are for the combined OASI and DI Trust Funds.
www.ssa.gov /OACT/ProgData/intRates.html   (299 words)

  
 Simple and Compound Interest Rates
An interest rate is the cost stated as a percent of the amount borrowed per period of time, usually one year.
The interest earned in each period is added to the principal of the previous period to become the principal for the next period.
You must adjust the interest rate and the number of periods to be consistent with compounding periods.
www.getobjects.com /Components/Finance/TVM/iy.html   (838 words)

  
 Interest rate article - Interest rate yield bond nominal interest rate real vs. nominal economics - What-Means.com   (Site not responding. Last check: 2007-11-07)
The interest rate is the price paid for the use of money for a period of time.
Note that the real interest rate is calculated by adjusting the actual rate charged (known as the money or nominal interest rate) to take inflation into account.
Interest rate article - Interest rate definition - what means Interest rate
www.what-means.com /encyclopedia/Interest_rate   (471 words)

  
 Glossary of Frequently Used Terms - H-I
Interest is paid on deposits because they are, in effect, loans to the bank or other deposit-taking institution.
The interest payable on a debt expressed as a percentage of the debt over a period of time (usually a year).
If a loan's interest rate is 8 per cent annually you pay $8 interest each year for every $100 borrowed.
www.fin.gc.ca /gloss/gloss-hi_e.html#intrate-nom   (1017 words)

  
 Effective Interest Rate   (Site not responding. Last check: 2007-11-07)
The effective interest rate does take the compounding period into account and thus is a more accurate measure of interest charges.
A statement that the "interest rate is 10%" means that interest is 10% per year, compounded annually.
In this case, the nominal annual interest rate is 10% and the effective annual interest rate is also 10%.
www.poorstudents.us /IME/Tutorials/4D.htm   (264 words)

  
 Real and Nominal Interest Rate Determination
This is because interest rates are important to a very large number of individuals in the economy; participants in the financial markets, home owners, farmers, small businesses and anyone else who borrows or lends money.
Short term interest rates will depend expected inflation in the near future, while longer term interest rates will depend on expected inflation into the more distant future (so that a ten year government bond will yield an interest rate which depends on the expected inflation rate in the next ten years).
However, in the longer run all nominal interest rates appear to adjust to inflation in a manner well described by the Fisher equation, once allowance is made for slowly adjusting expectations.
www.economics.unimelb.edu.au /TLdevelopment/econochat/Crosbyecon00.html   (1149 words)

  
 Compound Interest Rate   (Site not responding. Last check: 2007-11-07)
In the field of derivatives trading, a popular form of swap is the interest rate swap, in which one party exchanges a stream of interest for another stream.
Interest rate swaps are often used by companies to re-allocate their exposure to interest-rate fluctuations, typically by exchanging fixed-rate obligations for floating rate obligations.
In accounting and finance, the accrual basis of an interest calculation is a convention whereby an interest amount is calculated from the principal, expressed in units of a specified currency, and a percentage, and an agreed start and end date.
www.wwwtln.com /finance/46/compound-interest-rate.html   (1010 words)

  
 Real Interest Rate   (Site not responding. Last check: 2007-11-07)
If you remember the equation for profitability of investment--profitability equals rental rate plus appreciation minus interest cost, you can see that if a capital good is appreciating at the rate of expected inflation, then higher expected inflation reduces the cost of capital (holding the nominal interest rate constant).
The difference between long-term and short-term rates is called the "yield curve." When bond market investors have a different view of the economy from that of the monetary authority (which in the United States is the Federal Reserve), the yield curve may change in ways that offset changes in short-term interest rates.
The important point to remember is that there is sometimes slack in the connection between the interest rate that monetary policy can affect and the interest rate that matters for investment.
arnoldkling.com /econ/macro/interest.html   (556 words)

  
 FOREIGN EXCHANGE RELATIONSHIPS
The real interest rate r is the interest rate after adjustment for inflation.
It is the interest rate that lenders have to have to be willing to loan out their funds.
Suppose the nominal risk-free interest rates in the U.S. and France are 8% and 11%, respectively and the tax rates are 0.3 and 0.4, also respectively.
www.sjsu.edu /faculty/watkins/fisher.htm   (650 words)

  
 nominal interest rate   (Site not responding. Last check: 2007-11-07)
interest rate for the duration of the loan at the prevailing long-term rate whereas the sequence of six medium-term loans exposes the lender to changes in nominal...
The interest rate stated on the face of the note or loan documents.
Interest Rate Rules and Nominal Determinacy Interest Rate Rules and Nominal Determinacy In this paper we analyze issues concerning nominal determinacy when the monetary authority uses the interest...
www.lafermemartinette.qc.ca /nominal-interest-rate.html   (472 words)

  
 Nominal vs Real Variables   (Site not responding. Last check: 2007-11-07)
Generally a real variable, such as the real interest rate, is one where the effects of inflation have been factored in.
A nominal variable is one where the effects of inflation have not been accounted for.
This 6% is the nominal interest rate, as we have not accounted for inflation.
www.eco.utexas.edu /graduate/Konstantinova/a20_NomReal.htm   (619 words)

  
 Real Interest Rate
The amount by which the nominal interest rate is higher than the inflation rate.
The real rate of interest is approximated by taking the nominal interest rate and subtracting inflation.
The real interest rate is the growth rate of purchasing power derived from an investment.
vwww.investopedia.com /terms/r/realinterestrate.asp   (105 words)

  
 Calculator, TI 83, Interest Rate Conversion   (Site not responding. Last check: 2007-11-07)
The interest conversion function can be used when either the nominal interest rate is given, and the annual effective interest rate is needed, or when the annual effective rate is given and the nominal rate is needed.
To use this function, go to menu items B and C to convert interest rates from an annual effective rate to a nominal rate (Nom () or from a nominal rate to an annual effective rate (Eff().
This process can be reversed, for example, to find the Nominal rate when the Effective rate is given.
homepages.wmich.edu /~balik/calculator/83intconvt.htm   (212 words)

  
 Nominal Interest Rate   (Site not responding. Last check: 2007-11-07)
Now, if you expected inflation to be 10 percent from today until one year from now, what nominal (market) interest rate would you demand to get the 5 percent real rate of interest that you want, assuming there is no risk or uncertainty associated with this transaction?
To get the 5% real rate of interest that you want, someone would have to be willing to pay you an extra 10 percent to compensate for inflation.
You will need to get at least a 15 percent nominal rate because inflation will eat up 10 percent of the value of your money over time.
www.cals.ncsu.edu /course/are012/lecture/lectur4/tsld013.htm   (226 words)

  
 Interest rate, foreclosure - View Mortgage Rates   (Site not responding. Last check: 2007-11-07)
The interest rate is fixed for the life of the loan, giving you the ability to Interest rate is applied to the entire balance and is subject to change
This interest rate section of the CBOT site is home of treasury bonds, t bills, notes, currencies and swaps.
A key consideration, however, is which interest rate is rounded up.
foreclosure.allinfosites.com /q/foreclosure-interest-rate.htm   (721 words)

  
 Real Indeterminacy in Monetary Models with Nominal Interest Rate Distortions: The Problem with Inflation Targets - ...
Abstract: : This paper demonstrates that in a standard monetary model there exists real indeterminacy whenever the nominal interest rate moves too closely with the real rate.
A particular example of such a policy is if the central bank were to target the inflation rate.
The conclusion is robust to (1) a wide range of calibrations, (2) a more general monetary policy that targets a varying path for the inflation rate, and (3) a monetary environment that allows for...
citeseer.ist.psu.edu /carlstrom98real.html   (501 words)

  
 [No title]   (Site not responding. Last check: 2007-11-07)
A long-term mortgage rate can be thought of as a series of anticipated short-term rates.
We normally quote rates as nominal annual rates.
One point = 1% of the loan paid at the time the loan is made (the loan closing).
sbufaculty.tcu.edu /lipscomb/CLASSNOTES-Chapter4JBL.doc   (493 words)

  
 MSN Encarta - Dictionary - nominal interest rate
MSN Encarta - Dictionary - nominal interest rate
Search for "nominal interest rate" in all of MSN Encarta
predetermined rate of interest: an interest rate given in a contract, which applies irrespective of inflation
encarta.msn.com /dictionary_561547654_561581570/nextpage.html   (64 words)

  
 Nominal and Effective Interest Rates Calculator, by East West Mortgage, Your online mortgage source. 1.800.844.1015.
Nominal and Effective Interest Rates Calculator, by East West Mortgage, Your online mortgage source.
Here are some Mortgage calculators that might interest you.
Please Note: The calculator's accuracy to your circumstances may not be guaranteed.
www.ewmortgage.com /ewmco/mortgage_calculator/mc_interest_rate.htm   (91 words)

  
 Nominal Exchange Rates and Nominal Interest Rate Differentials   (Site not responding. Last check: 2007-11-07)
Nominal Exchange Rates and Nominal Interest Rate Differentials
Other research-related activities and publications of the IMF can be found at IMF Research
Use the free Adobe Acrobat Reader to view this PDF file.
www.imf.org /external/pubs/cat/longres.cfm?sk=3296.0   (167 words)

  
 Real Indeterminacy in Monetary Models with Nominal Interest Rate Distortions
This paper demonstrates that in a standard flexible-price monetary model there exists real indeterminacy whenever the nominal interest rate moves too closely with either current or forecasted inflation.
"Real indeterminacy in monetary models with nominal interest rate distortions: the problem with inflation targets," Working Paper 9818R, Federal Reserve Bank of Cleveland.
"Limits on interest rate rules in the IS model," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 47-75.
ideas.repec.org /a/red/issued/v4y2001i4p767-789.html   (1291 words)

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