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# How does rink influence the rate of interest?

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## Related Questions

###### Asked in Interest Rates

### What is the rate of Risk-Free interest?

Risk-free interest is the rate of interest which exists when the
expected risk of the economic transaction is zero. In most cases,
the general interest rates in major banks of a country reflects the
nominal interest rate, which is risk free. The real interest rate
is simply the nominal interest rate minus the rate of
inflation.

###### Asked in Business & Finance, Mathematical Finance

### When you are earning interest is it better to have high or low rates?

High rates.
However, high interest rates are usually a consequence of high
inflation rates and so what matters is not the interest rate but
the real interest rate which is the nominal interest rate
relative to the inflation rate.
Thus a 3% interest rate when inflation is 1% is better that a 5%
interest rate when inflation is 4%.