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they should consider the real interest rate. the real rate is just the nominal rate plus inflation. so say i have a retirement account that pays 2 % fixed nominal interest (for the sake of example). average inflation is usually around 4 %. If I only consider nominal interest rate then effectively i am losing 2% a year since the value of my investment has failed to keep up with the rate of depreciation (inflation).

Since:

real interest rate= the interest rate after adjusting for inflation

and

nominal interest rate= the current interest rate before adjusting for inflation,

you can be assured that the answer is probably the real interest rate. Since you can't really tell how much inflation is going to be, you should probably consult a source, and adjust accordingly.

If someone keeps putting 1000 dollars in every month, for example, throughout the year, because of inflation, the actual value of the money goes down. Likewise, let's say inflation goes up 3% every year. So, the first year, your money is worth 1000, then your money is work 970 the second year. You have to put more money in there to equal the amount of return with respect to inflation every time.

If not, the person could say "I will have 10,000 dollars in ten years!" Yes, you will have 10,000, but in reality because of inflation, 10,000 won't buy so much anymore.

So with regards to inflation, the real interest rate adjusts for this so you get the money that can buy a certainamount of goods, instead of a certain dollar amount of goods.

This is the easiest way to think about it. If you had a saving account, and put 1000$ in there,and you earned a 2 percent interest.and inflation kicks in to 3 percent... your interest rate is actually lower because ittakes more money to buy the same amount of goods.

So in a nutshell, if you use the real interest rate, you aren't adjusting for inflation, which could cause you to be saving less than you actually intended or wanted to.

6. "communicate with the recommendation above" What records? 7. hire (B) 8. the variation between nominal and genuine GDP is that genuine GDP has a base 12 months and the nominal GDP is interior the present 12 months value. the variation will tutor inflation or familiar value point. If nominal is under genuine then the final value has greater suitable over that era. (A) 9. government purchases. (A)