[{"data":1,"prerenderedAt":181},["ShallowReactive",2],{"term:real-interest-rate":3},{"term":4,"related":168},{"id":5,"title":6,"body":7,"category":150,"description":151,"extension":152,"faq":153,"meta":154,"navigation":155,"path":156,"related":157,"seo":161,"stem":162,"takeaways":163,"__hash__":167},"terms\u002Fterms\u002Freal-interest-rate.md","Real Interest Rate",{"type":8,"value":9,"toc":143},"minimark",[10,15,19,22,26,136,140],[11,12,14],"h2",{"id":13},"understanding-real-interest-rate","Understanding Real Interest Rate",[16,17,18],"p",{},"The nominal rate is what a loan or deposit states; the real rate is what you earn or pay in purchasing power. The Fisher equation approximates it as the nominal rate minus inflation.",[16,20,21],{},"Real rates drive saving and investment decisions; a negative real rate means money in the bank loses value even as the balance grows.",[11,23,25],{"id":24},"formula","Formula",[27,28,31],"span",{"className":29},[30],"katex-display",[27,32,35,72],{"className":33},[34],"katex",[27,36,39],{"className":37},[38],"katex-mathml",[40,41,44],"math",{"xmlns":42,"display":43},"http:\u002F\u002Fwww.w3.org\u002F1998\u002FMath\u002FMathML","block",[45,46,47,67],"semantics",{},[48,49,50,54,58,61,64],"mrow",{},[51,52,53],"mi",{},"r",[55,56,57],"mo",{},"≈",[51,59,60],{},"i",[55,62,63],{},"−",[51,65,66],{},"π",[68,69,71],"annotation",{"encoding":70},"application\u002Fx-tex","r \\approx i - \\pi",[27,73,77,104,125],{"className":74,"ariaHidden":76},[75],"katex-html","true",[27,78,81,86,92,97,101],{"className":79},[80],"base",[27,82],{"className":83,"style":85},[84],"strut","height:0.4831em;",[27,87,53],{"className":88,"style":91},[89,90],"mord","mathnormal","margin-right:0.0278em;",[27,93],{"className":94,"style":96},[95],"mspace","margin-right:0.2778em;",[27,98,57],{"className":99},[100],"mrel",[27,102],{"className":103,"style":96},[95],[27,105,107,111,114,118,122],{"className":106},[80],[27,108],{"className":109,"style":110},[84],"height:0.7429em;vertical-align:-0.0833em;",[27,112,60],{"className":113},[89,90],[27,115],{"className":116,"style":117},[95],"margin-right:0.2222em;",[27,119,63],{"className":120},[121],"mbin",[27,123],{"className":124,"style":117},[95],[27,126,128,132],{"className":127},[80],[27,129],{"className":130,"style":131},[84],"height:0.4306em;",[27,133,66],{"className":134,"style":135},[89,90],"margin-right:0.0359em;",[11,137,139],{"id":138},"example","Example",[16,141,142],{},"A 5% savings rate with 3.7% inflation gives a real return of about 1.3%.",{"title":144,"searchDepth":145,"depth":145,"links":146},"",2,[147,148,149],{"id":13,"depth":145,"text":14},{"id":24,"depth":145,"text":25},{"id":138,"depth":145,"text":139},"economy","An interest rate adjusted for inflation.","md",[],{},true,"\u002Fterms\u002Freal-interest-rate",[158,159,160],"interest-rate","inflation","taylor-rule",{"title":6,"description":151},"terms\u002Freal-interest-rate",[164,165,166],"Real rate ≈ nominal rate − inflation.","It measures the true cost of borrowing.","It can be negative.","4tFs2IPt-S1CgmlUCxKgyjjHNKJV2hFhOhwpCDZUWC0",[169,173,177],{"title":170,"description":171,"path":172},"Inflation","The rate at which the general level of prices rises, eroding purchasing power.","\u002Fterms\u002Finflation",{"title":174,"description":175,"path":176},"Interest Rate","The cost of borrowing money, or the return for lending it, as a percentage per year.","\u002Fterms\u002Finterest-rate",{"title":178,"description":179,"path":180},"Taylor Rule","A formula suggesting where a central bank should set interest rates based on inflation and the output gap.","\u002Fterms\u002Ftaylor-rule",1793374005794]