The formula to calculate the Real Rate of Return (rr) is:
\[ r_r = \frac{1 + r_{nom}}{1 + \pi} - 1 \]
where:
Let's calculate the real rate of return with the following details:
Using the formula:
\[ r_r = \frac{1 + 0.065}{1 + 0.024} - 1 \approx 0.0400 = 4\% \]
