Inflation and Real Rate of Interest Calculator

<-- Real %

Given a nominal interest rate of 6.2%
and a real interest rate of 3.5%

Calculate the inflation rate:

Show relation of (n), (r), and (i)

1 + n = (1 + i)(1 + r)

Divide each side by (1 + r):

1 + n
1 + r

(1 + i)(1 + r)

1 + r

Solving for i, we get:

1 + i  =	1 + n
	1 + r

1 + i  =	1 + 0.062
	1 + 0.035

1 + i  =	1.062
	1.035

  1 + i  =  1.0260869565217

  i  =  1.0260869565217 - 1

  i  =  0.026086956521739

Convert Inflation Rate to a %

Inflation Percent = 0.026086956521739 * 100%

Inflation Percent = 2.6086956521739

Final Answer

Inflation Rate = 2.609%

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