Assume that in January 2014, Joe Biden had borrowed $50,000 from his bank and paid an interest rate of 3%. He paid it back on December 31, 2014. Explain what was the nominal interest C rate that Mr. Biden paid to his bank?
1. Determine the real interest rate that Mr. Biden paid in the 2014?
2. When we refer to the real interest rate, explain what is it that Mr. Biden paying for? ? Be specific.