UPSC CDS 1 2021 GK Paper

The nominal interest rate is either of two distinct things:
the rate of interest before adjustment for inflation, OR for interest rates "as stated" without adjustment for the full effect of compounding (also referred to as the nominal annual rate). An interest rate is called nominal if the frequency of compounding (e.g. a month) is not identical to the basic time unit in which the nominal rate is quoted (normally a year).