TeachMeFinance.com - explain nominal
nominal -- A measure based on current-dollar value. The nominal level of income or spending
is measured in current dollars. The nominal interest rate on debt selling at par is the ratio of the
current-dollar interest paid in any year to the current-dollar value of the debt when it was issued.
The nominal interest rate on debt initially issued or now selling at a discount includes as a payment
the estimated yearly equivalent
of the difference between the redemption price and the discounted price. The nominal exchange rate is
the rate at which a unit of one currency trades for a unit of another currency.
Nominal -- Existing in name only. A nominal price is one named for convenience. It is an assumed price a price assumed in the absence of an established or actual price.
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