What is the real interest rate if the current inflation rate is 5% and your investment pays 12.2%?
PLEASE TRY TO BE A SIMPLE AS POSSIBLE, preferably using excel!
Real interest rate | (1+Nominal rate)÷(1+Inflation rate)-1 |
Here, | |
Nominal rate | 12.20% |
Inflation rate | 5.00% |
Real interest rate | 6.86% |
(1+12.2%)÷(1+5%)-1 |
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