Real interest rates are dictated by the rate of inflation. Higher inflation rates erode consumers’ purchasing power and the amount of interest earned from investments such as deposits.

To calculate interest rate, multiply the principal amount of money by the time period involved (weeks, months, years, etc.). Then divide the amount of paid interest from that time period by that ...

You can calculate the real interest rate by subtracting the rate of inflation from the nominal interest rate. Here's the formula: Real interest rate = nominal interest rate - rate of inflation ...

the real interest rate would be -1.0 percent. Keep in mind that the CPI doesn’t tell the entire story of inflation. The government revised the CPI formula in the 1990s so that it understated the ...