The real interest rate accounts for the impact of inflation on the cost of loans and returns on savings. It is calculated by subtracting the inflation rate from the nominal interest rate.

Everybody knows what an interest rate is—it’s effectively a percentage of an amount over a year. If your savings account ...

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 ...