Real Interest Rate Calculator
See what your interest rate is worth after inflation, using
both the quick approximation and the exact Fisher formula.
Real Interest Rate Calculator
Approximate Real Rate
—
nominal − inflation
Difference
—
percentage points (approx − exact)
Exact Real Rate (Fisher)
—
Sample balance after the period
—
Assumptions & method
- Approximate: real ≈ nominal − inflation. Exact (Fisher): real = (1 + nominal) ÷ (1 + inflation) − 1.
- Nominal from real: approximate = real + inflation; exact = (1 + real) × (1 + inflation) − 1.
- The sample balance compounds annually at the nominal rate. “Today’s money” divides it by (1 + inflation)^years. In nominal-from-real mode, the exact nominal rate is used.
- Rates are constant, with no taxes or fees. Results are estimates, not guarantees.
Year-wise Purchasing Power
| Year | Nominal Value (₹) | Value in Today’s Money (₹) | Real Gain (₹) |
|---|
What is a real interest rate?
A nominal interest rate is the number printed on the deposit or loan. The real interest rate strips out inflation, so it measures the change in what your money can actually buy. Many people subtract inflation from the nominal rate as a shortcut. The exact Fisher relationship divides instead, because the price level and your balance both grow multiplicatively. At low rates the two answers nearly match, and at high rates the shortcut drifts further from the truth. This calculator shows both and works in either direction.