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Impact of inflation on interest rates

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Look at the concepts of real and nominal interest rates. How does inflation impact the interest you pay for loans such as a mortgage, car loan, or credit card loan? How do the concepts of real and nominal affect you when you get a raise?

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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.

Interest is the price that someone pays for the temporary use of someone else's funds. ...

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