If investors are to earn a 4.0% real interest rate, what nominal interest rate must they earn if the inflation rate is:

If investors are to earn a 4.0% real interest rate, what nominal interest rate must they earn if the inflation rate is:
 
Explanation
Some values below may show as rounded for display purposes, though unrounded numbers should be used for actual calculations.

Nominal interest rate	= [(1 + Real interest rate) × (1 + Inflation rate)] – 1
Nominal interest rate	= (1.040 × 1.00) – 1
	= .0400, or 4.00%
Nominal interest rate	= (1.040 × 1.050) – 1
	= .0920, or 9.20%
Nominal interest rate	= (1.040 × 1.070) – 1
	= .1128, or 11.28%