Answer:Real Interest rate= 1%
Explanation:
Real interest rate is an adjusted rate of interest in which the effects of inflation has been removed. For an investor, real interest rate can allow for real yield of fund and for the borrower, the real cost of the fund after the maturity dates. Also, depending on the volatility ( variations ) in inflation real interest rate also can pose a risk or certainty to both parties.
Using the Fisher equation,
Real Interest rate = Nominal interest rate - the actual inflation rate.
= 15.00 % - 14.00%
= 1%
