What is a nominal discount rate
Items 5 - 13 A nominal discount rate that reflects expected inflation should be used to discount nominal benefits and costs. Market interest rates are nominal nominal rate includes both the cost of capital and inflation. It is the rate that is used to discount actual, inflated future values. Part of the nominal interest rate goes To convert from nominal interest rates to real interest rates, we use the following formula: real interest rate ≈ nominal interest rate − inflation rate. To find the real