Real interest rate

What is Real interest rate?

Real interest rate meaning in finance terminology / glossary / dictionary is:
Real interest rate represents the rate earned by an investment, discounted for inflation. Say, for example, that an individual purchases a bond paying 6 percent interest, and the inflation rate is 5 percent. The real interest rate is 1 percent, or the portion of the rate that’s in excess of the inflation rate.

 

reference: MortgageLoan.com

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