Sentences with phrase «nominal interest rate per»

Not exact matches

The U.S. economy has never been willing to hold more than 10 cents of base money per dollar of nominal GDP except when interest rates were substantially below 2 %.

This is not how mortgage loans work, as mortgages utilize a nominal interest rate: the interest rate per year.

In that case, the rate per period is simply the nominal annual interest rate divided by the number of periods per year.

Basically, the lower interest rates are, the more cash or reserves («base money») people are willing to carry around, per dollar of nominal GDP.

As I noted this past January in Sixteen Cents: Pushing the Unstable Limits of Monetary Policy, a collapse in short - term yields to nearly zero is a predictable outcome of QE2, based on the very robust historical relationship between short - term interest rates and the amount of cash and bank reserves (monetary base) that people are willing to hold per dollar of nominal GDP:

Example: If the nominal annual interest rate is i = 7.5 %, and the interest is compounded semi-annually (n = 2), and payments are made monthly (p = 12), then the rate per period will be r = 0.6155 %.

In this case, regardless of the rate of inflation, the nominal interest rate is 10 % per annum (before tax).