In finance and economics, **nominal interest rate** or **nominal rate of interest** refers to two distinct things: the rate of interest before adjustment for inflation (in contrast with the real interest rate); or, for interest rates "as stated" without adjustment for the full effect of compounding (also referred to as the **nominal annual rate**). An interest rate is called *nominal* if the frequency of compounding (e.g. a month) is not identical to the *basic time unit* (normally a year).

Read more about Nominal Interest Rate: Nominal Versus Real Interest Rate, Nominal Versus Effective Interest Rate

### Other articles related to "nominal interest rate, interest, interest rate, rate, nominal, rates":

**Nominal Interest Rate**s

... Further information Fisher equation The

**nominal interest rate**is the amount, in percentage terms, of

**interest**payable ... $100 with a bank for 1 year and they receive

**interest**of $10 ... In this case, the

**nominal interest rate**is 10% per annum ...

... One common mathematical definition of APY uses this effective

**interest rate**formula, but the precise usage may depend on local laws where is the

**nominal interest rate**and is the number of ... Also, it is worth noting that a

**nominal interest rate**and its corresponding APY are very nearly equal when they are small ... For example (fixing some large N), a

**nominal interest rate**of 100% would have an APY of approximately 171%, whereas 5% corresponds to 5.12%, and 1% corresponds to 1.005 ...

**Nominal Interest Rate**- Examples - Daily Compounding

... A loan with daily compounding will have a substantially higher

**rate**in effective annual terms ... For a loan with a 10%

**nominal**annual

**rate**and daily compounding, the effective annual

**rate**is 10.516% ... a single lump sum), the borrower would pay $51.56 more than one who was charged 10%

**interest**, compounded annually ...

... of money demanded for transactions however is also likely to depend on the

**nominal interest rate**... However, in this case she would be giving up the (

**nominal**)

**interest rate**that she can get by holding her income in the bank ... t is the cost of a trip to the bank, R is the

**nominal interest rate**and P and Y are as before ...

... called Fisher parity or the Fisher Effect) is the proposition by Irving Fisher that the real

**interest rate**is independent of monetary measures, especially the ... Fisher equation is This means, the real

**interest rate**equals the

**nominal interest rate**minus expected inflation

**rate**... Here all the

**rates**are continuously compounded ...

### Famous quotes containing the words rate, nominal and/or interest:

“We honor motherhood with glowing sentimentality, but we don’t *rate* it high on the scale of creative occupations.”

—Leontine Young (20th century)

“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the *nominal* winner is often a real loser—in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.”

—Abraham Lincoln (1809–1865)

“Any effort in philosophy to make the obscure obvious is likely to be unappealing, for the penalty of failure is confusion while the reward of success is banality. An answer, once found, is dull; and the only remaining *interest* lies in a further effort to render equally dull what is still obscure enough to be intriguing.”

—Nelson Goodman (b. 1906)