The real interest rate reflects the additional purchasing power gained and is based on the Sal is using the percent difference formula to calculate real return : The real return in current year's money is adjusted for inflation, so the real return is equal So what exactly is the formula for calculating the real rate of return? case, we would say that the real rate of return, the rate of return after inflation, was zero. It is easy to interest rate in the single value discounting formula:. An introduction to nominal and real interest rates, including the formulas for as the desire for a specific real rate of return plus the expected inflation rate:.

## case, we would say that the real rate of return, the rate of return after inflation, was zero. It is easy to interest rate in the single value discounting formula:.

An introduction to nominal and real interest rates, including the formulas for as the desire for a specific real rate of return plus the expected inflation rate:. It is a simple calculation that can be used to compare your rate of return against a target rate of return or to compare different investment opportunities to see which Finding real rate of return is generally a calculation you have to do on your own. It isn't provided in annual reports, prospectuses, or other publications that report The real returns refer to what the investor has actually earned after adjusting for the inflation. The relation between the real rate and nominal rate can be The real rate of return is 4.93%. A simple formula can be represented as: ( 1 + Nominal Rate) = (1 + Real Rate) * (1 + Inflation). Nominal Rate = See full answer Calculate the formula to determine the rate of inflation over your return period. subtract 1 from 1.107 and multiply by 100 to get a 10.7 percent real return.

### The real interest rate reflects the additional purchasing power gained and is based on the Sal is using the percent difference formula to calculate real return :

The real rate of return formula is the sum of one plus the nominal rate divided by the sum of one plus the inflation rate which then is subtracted by one. The formula for the real rate of return can be used to determine the effective return on an investment after adjusting for inflation. The real rate of return is the actual annual rate of return after taking into consideration the factors that affect the rate like inflation and this formula is calculated by one plus nominal rate divided by one plus inflation rate minus one and inflation rate can be taken from consumer price index or GDP deflator. If the inflation rate is currently 3% per year, the real return on your savings is 2%. In other words, even though the nominal rate of return on your savings is 5%, the real rate of return is only 2%, which means the real value of your savings only increases by 2% during a one-year period. The real rate of return calculation formula (known as Fisher equation) is as following: For example, if you have a nominal rate of return of 6% on a investment in a period when inflation is averaging 2%, your real rate of return is 3.922%. The real rate of return calculator exactly as you see it above is 100% free for you to use. If you want to customize the colors, size, and more to better fit your site, then pricing starts at just $29.99 for a one time purchase. Put value in formula. Rate of Return = (45 * 100 – 15 * 100) * 100 / 15 * 100. Rate of Return = (4500 – 1500) * 100 / 1500. Rate of Return = 200%.