nominal interest rate

Nominal Interest Rate

The interest rate unadjusted for inflation.

Notes:

Not taking into account inflation gives a less realistic number.

See also: Inflation, Interest Rate, Real Interest Rate

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Nominal interest rate

The interest rate unadjusted for inflation.

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nominal interest rate

The stated rate of interest, exclusive of any compounding, that is paid on an investment. Annual interest of $80 on a $1,000 investment is a nominal rate of 8% whether the interest is paid in $20 quarterly installments, in $40 semiannual installments, or in an $80 annual payment. Use of nominal rates can be misleading when comparing returns from different investments. See also effective rate of interest.