Compare the difference between the nominal interest rate which tells savers how the dollar value of their savings or investments will grow, and the real interest rate which tells savers how the purchasing power of their savings or investments will grow.
Given the nominal interest rate and the rate of inflation over the course of one year, explain what will happen to the purchasing power of savings.
Subject Area: Social Studies
Strand: Financial Literacy
Date Adopted or Revised: 04/15
Status: State Board Approved