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Finance Dictionary and Glossary of Investment Terms
Real interest rate
Definition 1.
e rate of interest excluding the effect of expected inflation; that is, the rate that is earned in terms of constant-purchasing-power dollars. Interest rate expressed in terms of real goods, i.e. nominal interest rate adjusted for expected inflation.
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Definition 2.
The current interest rate minus the current inflation rate.
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Definition 3.
The amount by which the nominal interest rate is higher than the inflation rate.
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