Inflation not only erodes the purchasing power of the dollar, it also impacts borrowing costs and real economic returns on investment securities. For this reason, investors are wise to understand and ...

The nominal rate of return shows the yield of an investment over time without accounting for negative elements such as inflation or taxes. By calculating the nominal rate of return, you can compare ...

Real rate of return adjusts for inflation, providing a true growth measure. S&P 500's real rate is 7.9%, versus a nominal 11.8%, due to inflation. Using real rates in retirement planning ensures ...

The nominal interest rate is the simple interest charged on a loan or paid on a deposit. Real interest is nominal interest after taking inflation’s effects into account. Economists, as well as lenders ...

Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. David is comprehensively experienced in many facets of financial and legal ...

Focusing on the nominal rate of return can give you a false idea of how much income you’ll receive from your investments. Instead, the real rate of return will help you understand how much money ...