Anika's savings account has a stated interest rate of 2.5%. After inflation, the real return on her savings account is 1%. What is the nominal

interest rate on the account?

2.5%

Step-by-step explanation:

Step 1:

Stated Interest Rate:

Stated interest rate of an savings account is a percentage which is calculated per year and refers to the return on the investment made.

Nominal Interest Rate:

Nominal interest rate is the rate received by the depositor before taking into account the inflation rate.

Step 2:

Hence from the above explanation, we get that the nominal interest rate is equal to the stated interest rate and does not include the inflation rate.

Since the stated rate here is 2.5%, the nominal rate of interest for this savings account is also 2.5%