raunvaxtarhraða
Raunvaxtarhraði is an Icelandic term that translates to "real growth rate" or "real interest rate" in English. It refers to the rate at which an investment or a debt increases over time, adjusted for the effects of inflation. In essence, it measures the true increase in purchasing power.
The calculation of the real growth rate is crucial for understanding the actual profitability of investments
The formula commonly used to approximate the real growth rate is: Real Growth Rate ≈ Nominal Growth
Understanding raunvaxtarhraði is vital for economic decision-making, both for individuals managing their personal finances and for