• R is a measure of nominal interest rates L(R,Y) is the aggregate real money demand Alternatively: Md/P = L(R,Y) Aggregate real money demand is a function of national income and the nominal interest rate.
• As discussed earlier, the nominal interest rate is the market rate of return/interest that will be earned by/charged to the customer, while the real interest rate is the effective rate that an investor will realize.

### Money Market Real Or Nominal Interest Rate Economics

The nominal interest rate (or money interest rate) is the percentage increase in money you pay the lender for the use of the money you borrowed. For instance, imagine that you borrowed \$100 from your bank one year ago at 8% interest on your loan. When you repay the loan, you must repay the \$100 you borrowed plus \$8 in interest—a total of \$108. Real and nominal interest rates. Interest represents a payment in the future for a transfer of money in the past. The nominal interest rate (i) is the interest rate usually reported and not corrected for inflation.  ### Money Market Real Or Nominal Interest Rate Calculator

1. Learning Outcomes
2. Introduction
1. Nominal interest rate
2. Real interest rate
3. Relation between Real and Nominal interest rate
4. Relationship between Real and nominal interest rate and Expected Inflation: Fisher equation
5. Different applications of Real and Nominal interest rate
1. Real versus Nominal interest rate and Present values
2. Real versus Nominal interest rate and the IS-LM model
6. Fisher effect in economics
7. Summary 