If the nominal interest rate is 7 percent and the inflation rate is 3 percent, then the real interest rate is.

The real interest rate is the rate of interest received (or expected to receive) by an investor, saver, or lender after adjusting for inflation.
The Fisher equation, which indicates that the real interest rate is approximately the nominal interest rate minus the inflation rate, can be used to define it more explicitly.
Real interest rates are fundamentally influenced by the degree of saving and fixed investment in the economy.
All else being equal, if saving grows or fixed investment reduces, the real interest rate falls; if saving decreases or fixed investment increases, the real interest rate rises.
Real interest rate = Nominal interest rate - Inflation

By inserting values in the given formula, Real interest rate = Nominal interest rate - Inflation:

Real interest rate = 7 - 3

Real interest rate = 4

Therefore, if the nominal interest rate is 7 percent and the inflation rate is 3 percent, then the real interest rate is 4 percent.

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