A household has a personal loan that charges nominal interest of 5.8% a year. Inflation over the same year is 3.6%.
Real interest rate = nominal interest rate - inflation rate
Use this formula to calculate the approximate real interest rate on the loan.
62 exam-style questions on OCR GCSE Economics 3.4 Price stability, covering 3.4.1 Price stability and inflation, 3.4.2 Measuring inflation with CPI, 3.4.3 Calculate the effect of inflation, 3.4.4 Analyse inflation figures, and 3.4.5 Causes and consequences of inflation. Each one has a worked solution and a mark scheme showing where the marks go.