LO 4.2.2: Calculate an inflation-adjusted interest rate.

Question 1

Inflation-adjusted interest rate formula

Answer 1

• [ (1+rate of return) / (1+ rate of inflation) - 1] X 100

* Use this in the problem for the I/YR register

Question 2

How to calculate inflation-adjusted rate of return using the calculator

Answer 2

• 1+rate of inflation > INPUT > 1+rate of return > SHIFT > % CHG
• Use this just when calculating rate or checking.