## 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

Real Rate of Interest = 3.76%

#### You have 2 free calculationss remaining

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