Sentences with phrase «nominal rate equals»

Not exact matches

This occurs when the nominal interest rate is equal to the growth rate of nominal wages.

Of course we all know (except for Janet Yellen) that nominal wages may rise equal to the inflation rate plus productivity increase with no inflationary effect.

Calculating the effect of inflation on the interest rate of a loan results in a figure called the real interest rate, which is roughly equal to the difference between a loan's advertised interest rate, called the nominal rate, and the rate of inflation:

Using the nominal 6 percent fixed rate, solving for r = (1 + 0.06 / 12) ^ 12 - 1, gets r = 1.0616778 - 1, or 0.061678; when changed to a percentage, it equals 6.1678 percent.

The Investment Return equals (0.6 * the initial dividend yield of Stock A + 0.4 * [the 2 % real TIPS interest rate + the 3.0 % inflation rate]-RRB- + (0.6 * the nominal growth rate of the Stock A dividends + 0.4 * the growth rate of TIPS (which equals the 3 % inflation rate)-- the 3.0 % inflation rate.

The math calculation of RRSP and TFSA benefits ($ 1,165) equals the difference between the future values of the after tax savings ($ 3,500) compounded for 10 years, at the nominal rate of return (10 %) vs. at the after - tax rate of return (8.5 %).

You'll note that 4.854 % is approximately equivalent to just taking 8 % (the nominal return) minus 3 % (inflation rate), which equals 5 % (the approximate real return).

For planning purposes, assume that the sum of the initial dividend yield and the annual NOMINAL dividend growth rate equals a constant.