How to find real interest rate - AP Macroeconomics
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The real interest rate can be approximated by the Fisher equation: 
What is the exact formula for the real interest rate?
The real interest rate can be approximated by the Fisher equation:
What is the exact formula for the real interest rate?
The real interest rate is defined as the nominal appreciated value of assets divided by the new price level of the assets. The nominal appreciated value is simply 
, while the new price level is equal to 
. This gives the real appreciated value of assets. We then subtract 1 to get the real interest rate.
Example: 
(according to the Fisher equation)
The Fisher equation comes close, but is not actually correct.
The real interest rate is defined as the nominal appreciated value of assets divided by the new price level of the assets. The nominal appreciated value is simply
Example:
The Fisher equation comes close, but is not actually correct.
Compare your answer with the correct one above
The real interest rate can be approximated by the Fisher equation:
What is the exact formula for the real interest rate?
The real interest rate can be approximated by the Fisher equation:
What is the exact formula for the real interest rate?
The real interest rate is defined as the nominal appreciated value of assets divided by the new price level of the assets. The nominal appreciated value is simply , while the new price level is equal to . This gives the real appreciated value of assets. We then subtract 1 to get the real interest rate.
Example: (according to the Fisher equation)
The Fisher equation comes close, but is not actually correct.
The real interest rate is defined as the nominal appreciated value of assets divided by the new price level of the assets. The nominal appreciated value is simply
Example:
The Fisher equation comes close, but is not actually correct.
Compare your answer with the correct one above