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Real Interest Rate Calculator

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 4.5% and the inflation rate is 1.2%, then:

Real Interest Rate = 4.5% – 1.2%

Real Interest Rate = 3.3%

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