What this calculator does
Real interest rate (Fisher equation) works out what an interest rate is worth once expected inflation is stripped out. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaExact (Fisher): r = (1 + nominal) / (1 + inflation) − 1; Quick approximation: r ≈ nominal − inflation
The inputs explained
| Field | What to enter |
|---|---|
| Nominal interest rate (%) | A number, measured in %. Starts at 6. |
| Expected inflation rate (%) | A number, measured in %. Starts at 3. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with nominal interest rate
Every other input is held at the calculator’s starting values while nominal interest rate varies. Select any row to load that scenario into the calculator.