Time & moneyAges 16-18

Nominal vs real interest & inflation

Use the Fisher approximation (real ≈ nominal − inflation) to find the inflation-adjusted return. Review suitability for your learners before teaching.

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Worksheet StudioPractice pack · Ages 16-18

Nominal vs real interest & inflation

Take your time. Show your thinking.

1. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.8% and inflation is 2.1%.
7.8% · 2.1% · Nominal vs real interest &…
2. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.0% and inflation is 4.3%.
7.0% · 4.3% · Nominal vs real interest &…
3. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.1% and inflation is 6.6%.
7.1% · 6.6% · Nominal vs real interest &…
4. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 6.6% and inflation is 1.4%.
6.6% · 1.4% · Nominal vs real interest &…
5. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 8.8% and inflation is 4.6%.
8.8% · 4.6% · Nominal vs real interest &…
6. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 6.8% and inflation is 5.6%.
6.8% · 5.6% · Nominal vs real interest &…
7. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 9.1% and inflation is 7.1%.
9.1% · 7.1% · Nominal vs real interest &…
8. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.4% and inflation is 5.1%.
7.4% · 5.1% · Nominal vs real interest &…
9. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 4.1% and inflation is 2.1%.
4.1% · 2.1% · Nominal vs real interest &…
10. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 5.7% and inflation is 1.3%.
5.7% · 1.3% · Nominal vs real interest &…
11. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 2.2% and inflation is 1.1%.
2.2% · 1.1% · Nominal vs real interest &…
12. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 8.8% and inflation is 3.4%.
8.8% · 3.4% · Nominal vs real interest &…

12 questions · Seed 42 · Age guidance, not curriculum certification

View the answer key

Worksheet StudioAnswer key · Ages 16-18

Nominal vs real interest & inflation

Answers and reasoning. Review before teaching.

1. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.8% and inflation is 2.1%.
5.7%
Real interest rate r ≈ 7.8% − 2.1% = 5.7%.
2. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.0% and inflation is 4.3%.
2.7%
Real interest rate r ≈ 7.0% − 4.3% = 2.7%.
3. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.1% and inflation is 6.6%.
0.5%
Real interest rate r ≈ 7.1% − 6.6% = 0.5%.
4. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 6.6% and inflation is 1.4%.
5.2%
Real interest rate r ≈ 6.6% − 1.4% = 5.2%.
5. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 8.8% and inflation is 4.6%.
4.2%
Real interest rate r ≈ 8.8% − 4.6% = 4.2%.
6. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 6.8% and inflation is 5.6%.
1.2%
Real interest rate r ≈ 6.8% − 5.6% = 1.2%.
7. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 9.1% and inflation is 7.1%.
2.0%
Real interest rate r ≈ 9.1% − 7.1% = 2.0%.
8. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.4% and inflation is 5.1%.
2.3%
Real interest rate r ≈ 7.4% − 5.1% = 2.3%.
9. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 4.1% and inflation is 2.1%.
2.0%
Real interest rate r ≈ 4.1% − 2.1% = 2.0%.
10. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 5.7% and inflation is 1.3%.
4.4%
Real interest rate r ≈ 5.7% − 1.3% = 4.4%.
11. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 2.2% and inflation is 1.1%.
1.1%
Real interest rate r ≈ 2.2% − 1.1% = 1.1%.
12. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 8.8% and inflation is 3.4%.
5.4%
Real interest rate r ≈ 8.8% − 3.4% = 5.4%.

12 questions · Seed 42 · Age guidance, not curriculum certification

Worksheet StudioPractice pack · Ages 16-18

Nominal vs real interest & inflation

Take your time. Show your thinking.

1. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.8% and inflation is 2.1%.
7.8% · 2.1% · Nominal vs real interest &…
2. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.0% and inflation is 4.3%.
7.0% · 4.3% · Nominal vs real interest &…
3. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.1% and inflation is 6.6%.
7.1% · 6.6% · Nominal vs real interest &…
4. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 6.6% and inflation is 1.4%.
6.6% · 1.4% · Nominal vs real interest &…
5. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 8.8% and inflation is 4.6%.
8.8% · 4.6% · Nominal vs real interest &…
6. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 6.8% and inflation is 5.6%.
6.8% · 5.6% · Nominal vs real interest &…
7. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 9.1% and inflation is 7.1%.
9.1% · 7.1% · Nominal vs real interest &…
8. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.4% and inflation is 5.1%.
7.4% · 5.1% · Nominal vs real interest &…
9. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 4.1% and inflation is 2.1%.
4.1% · 2.1% · Nominal vs real interest &…
10. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 5.7% and inflation is 1.3%.
5.7% · 1.3% · Nominal vs real interest &…
11. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 2.2% and inflation is 1.1%.
2.2% · 1.1% · Nominal vs real interest &…
12. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 8.8% and inflation is 3.4%.
8.8% · 3.4% · Nominal vs real interest &…

12 questions · Seed 42 · Age guidance, not curriculum certification

Worksheet StudioAnswer key · Ages 16-18

Nominal vs real interest & inflation

Answers and reasoning. Review before teaching.

1. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.8% and inflation is 2.1%.
5.7%
Real interest rate r ≈ 7.8% − 2.1% = 5.7%.
2. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.0% and inflation is 4.3%.
2.7%
Real interest rate r ≈ 7.0% − 4.3% = 2.7%.
3. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.1% and inflation is 6.6%.
0.5%
Real interest rate r ≈ 7.1% − 6.6% = 0.5%.
4. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 6.6% and inflation is 1.4%.
5.2%
Real interest rate r ≈ 6.6% − 1.4% = 5.2%.
5. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 8.8% and inflation is 4.6%.
4.2%
Real interest rate r ≈ 8.8% − 4.6% = 4.2%.
6. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 6.8% and inflation is 5.6%.
1.2%
Real interest rate r ≈ 6.8% − 5.6% = 1.2%.
7. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 9.1% and inflation is 7.1%.
2.0%
Real interest rate r ≈ 9.1% − 7.1% = 2.0%.
8. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 7.4% and inflation is 5.1%.
2.3%
Real interest rate r ≈ 7.4% − 5.1% = 2.3%.
9. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 4.1% and inflation is 2.1%.
2.0%
Real interest rate r ≈ 4.1% − 2.1% = 2.0%.
10. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 5.7% and inflation is 1.3%.
4.4%
Real interest rate r ≈ 5.7% − 1.3% = 4.4%.
11. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 2.2% and inflation is 1.1%.
1.1%
Real interest rate r ≈ 2.2% − 1.1% = 1.1%.
12. Using the Fisher approximation (r ≈ i − π), find the real interest rate if the nominal interest rate is 8.8% and inflation is 3.4%.
5.4%
Real interest rate r ≈ 8.8% − 3.4% = 5.4%.

12 questions · Seed 42 · Age guidance, not curriculum certification