Real Interest vs. Nominal Interest: What’s the Difference?

Start talking about money and interest rates come into the equation.  Get a mortgage, buy a house, or get an auto loan—you will hear about interest rates.  But what you may not know is that the interest rate referenced most of the time is the nominal interest rate, and not the real interest rate.  So [...]

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How Interest Rates Work

If you want to purchase something now but do not have the cash to spend, what you can do is to borrow it. This borrowing does have a cost though, it is called interest. It is an amount that you have to pay on top of the money you have loaned– the principal amount. The [...]

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