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Inflation and Real Rate of Interest Calculator
Enter 2 out of 3 inflation items
<-- Nominal %
<-- Inflation %
<-- Real %
Given a nominal interest rate of 4.8%
and an inflation rate of 1%
calculate the real interest rate:
Show relation of (n), (i), and (
r
)
1 + n = (1 + i)(1 +
r
)
Divide each side by (1 + i):
1 + n
1 + i
=
(1 + i)(1 +
r
)
1 + i
Solve for r
1 +
r
=
1 + n
1 + i
1 +
r
=
1 + 0.048
1 + 0.01
1 +
r
=
1.048
1.01
1 +
r
= 1.0376237623762
r
= 1.0376237623762 - 1
r
= 0.03762
Convert Real Rate to a %
Real Percent = 0.03762 * 100%
Real Percent = 3.762
See Answer
Real Rate of Interest =
3.76%
What is the Answer?
Real Rate of Interest =
3.76%
How does the Inflation and Real Rate of Interest Calculator work?
Free Inflation and Real Rate of Interest Calculator - Calculates Real rate of Interest, Inflation, and nominal interest rate before inflation.
This calculator has 3 inputs.
What 1 formula is used for the Inflation and Real Rate of Interest Calculator?
1 + n = (1 + i)(1 + r)
For more math formulas, check out our
Formula Dossier
What 5 concepts are covered in the Inflation and Real Rate of Interest Calculator?
inflation
a general increase in the prices of goods and services in an economy
inflation and real rate of interest
interest rate
the proportion of a loan that is charged as interest to the borrower or proportion of principal credit given to a depositor
noinal interest rate
percent
a specified amount in or for every hundred. one part in every hundred.
n% = n/100
Inflation and Real Rate of Interest Calculator Video
Tags:
inflation and real rate of interest
inflation
interest rate
noinal interest rate
percent
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