Here's the formula: Real interest rate = nominal interest rate - rate of inflation (actual or expected) Here is an example from an investor's point of view. Say the initial interest rate on a bond ...

which is why the real interest rate provides a better picture of either. For example, putting $1,000 into a savings account that earns 2 percent annual interest at the start of the year would ...

The formula for calculating savings account interest uses the initial deposit, the annual interest rate and the years of ... the interest that accrues. For example, if your initial deposit was ...