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Real Rate (formula)

  1. #1
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    Real Rate (formula)

    Heres the problem. I have a list of nominal rates (percentages) and need to use them to make colums of "real rates".
    What formula do I use and how do I enter it?

    Nominal Returns.................................................Real Returns

    Large Stocks...Small Stocks....Inflation........Large Stocks...Small Stocks
    11.62%................0.30%...............-1.50................?...........................?
    37.49%................22.03%.............-2.03................?...........................?

    I know the answer to the first "Large Stock Real Return" should be 10.12%. The equation I used in my calculater is...
    (1+.1162/1-.0150) -1 =.1012
    (1+nominal / 1+interest rate) -1
    Last edited by Bill Fugitt; 07-09-2011 at 04:47 PM.

  2. #2
    Forum Expert shg's Avatar
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    Re: Real Rate (formula)

    I believe this is correct:

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