In: Finance
Say you own an asset that had a total return last year of 10.3 percent. If the inflation rate last year was 4.1 percent, what was your real return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
As per Fisher’s Equation
Nominal Interest Rate = Real Interest Rate + Inflation
So, 10.3 = Real Interest Rate + 4.1
So, Real Interest Rate = 10.3 – 4.1
= 6.20%
So, the Real Interest rate is 6.20%