Understanding the Fisher Effect
Real-time visualization of nominal rates, inflation, and purchasing power
The Domestic Fisher Effect explains how nominal interest rates adjust to expected inflation, maintaining real returns. This calculator helps visualize how inflation impacts the actual purchasing power of your investments.
Interactive Calculator
Adjust the sliders to see how nominal interest rates and inflation affect real returns
Calculated Rates
4.85%
Real Interest Rate
Approximate Real Rate: 5.00%
Difference: -0.15%
Practical Example
$100 Investment Scenario
After 1 year:
- Nominal amount: $108.00
- Purchasing power: $104.85
- Real gain: $4.85
Formula Reference
(1 + r) = (1 + i) / (1 + π)