Real Interest Rate Calculator
Subtract the inflation rate from the nominal interest rate to find the approximate real interest rate.
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Enter the nominal and inflation rates to see the real interest rate.
Worked example
With these example inputs:
- Nominal interest rate5%
- Inflation rate3%
Real interest rate: 2.0%
- If the first figure were 10% higher2.5%
Frequently asked questions
How is the real interest rate calculated?
The simple Fisher approximation subtracts inflation from the nominal rate. A 5% nominal rate with 3% inflation gives a real rate of about 2%.
When is the approximation less accurate?
At high inflation the exact Fisher equation, which divides rather than subtracts, is more precise. For small rates the subtraction is close enough for most uses.