Meaning of the word "real interest rate" in English

What does "real interest rate" mean in English? Explore the meaning, pronunciation, and specific usage of this word with Lingoland.

real interest rate

US /ˌriːəl ˈɪn.tər.ɪst ˌreɪt/
UK /ˌriːəl ˈɪn.tər.ɪst ˌreɪt/
"real interest rate" picture

Noun

1.

the rate of interest an investor expects to receive after allowing for inflation

Example:
The real interest rate is crucial for understanding the true cost of borrowing.
If inflation is higher than the nominal interest rate, the real interest rate can be negative.
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