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Real Interest Rate Calculator

LAST UPDATE: June 20th, 2018

Real Interest Rate Calculator

What is real interest rate?

The real interest rate is the interest rate adjusted for the inflation rate.

If an investor expected a 7% interest rate with inflation at 2%, the real interest rate would be 5% (7% minus 2%).

Formula

Real Interest Rate = Nominal Interest Rate – Inflation Rate

Example

If the nominal interest rate is 5.4% and the inflation rate is 1.7%, then:

Real Interest Rate = 5.4% – 1.7%

Real Interest Rate = 3.7%

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