which is why the real interest rate provides a better picture of either. For example, putting $1,000 into a savings account that earns 2 percent annual interest at the start of the year would ...

Here's the formula: Real interest rate = nominal interest rate - rate of inflation (actual or expected) Here is an example from an investor's point of view. Say the initial interest rate on a bond ...

The formula for simple interest is ... it is known as a coupon payment. For example, a $1,000 bond with a 6% coupon (interest rate) pays $60 per year, or $30 semiannually. If earnings were ...