Description: The nominal interest rate is the percentage applied to a capital over a specified period, without considering the effect of inflation. This indicator is fundamental in the financial realm, as it allows investors and borrowers to understand the cost of money in absolute terms. It is often expressed annually, although it can apply to different periods, such as monthly or quarterly. The nominal rate does not reflect the real purchasing power of money, as it does not account for the erosion of value that inflation can cause. Therefore, it is crucial for analysts and economists to differentiate between the nominal rate and the real interest rate, which does consider inflation. In the context of finance, the nominal interest rate is used to establish the terms of loans and savings, being a determining factor in the profitability of investments. Additionally, in statistical analysis, the nominal rate is employed to evaluate the performance of financial assets and to make comparisons between different investment instruments, facilitating informed decision-making by investors.
