Fisher Equation Calculator

Your details

Choose which variable you want to calculate. The other two become inputs.
The stated (unadjusted) interest rate on a loan, bond, or savings account before accounting for inflation.
%
The expected annual rate at which the general price level rises. Use the current CPI forecast or your own assumption.
%
Result (exact Fisher)Moderate real return
2.9412%

Calculated using the full identity: (1+i) = (1+r)(1+pi)

Result (approximation)3%
Approximation error0.0588%
Exact result (%)2.9412
Approximation (%)3
Approximation error (%)0.0588

Real interest rate: 2.9412% (exact Fisher)

  • The exact real interest rate is 2.9412%, while the approximation gives 3.0000%.
  • The approximation differs by 0.0588 percentage points. At these rate levels the shortcut is still reasonable for quick estimates.
  • A real rate of 2.94% means your purchasing power grows by roughly 2.94 cents for every dollar invested per year, after inflation.

Next stepTo maximize real returns, compare this rate against TIPS (Treasury Inflation-Protected Securities) yields, which represent the market consensus real rate.

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