In order to calculate the real interest rate, simply:
A) add the rate of inflation to the nominal interest rate.
B) subtract the rate of inflation from the nominal interest rate.
C) subtract the nominal interest rate from the rate of inflation.
D) divide the nominal interest earned by the rate of inflation.

Question

Quizplus · Accepted Answer

To calculate the real interest rate, you need to subtract the rate of inflation from the nominal interest rate. This gives you the actual increase in purchasing power of your money.

In Order to Calculate the Real Interest Rate, Simply