The interest rate gap is calculated as interest rate-sensitive assets less interest rate-sensitive liabilities. You can use this formula to calculate it.

Learn the impact of nominal, real, and effective interest rates on investors and borrowers, including inflation's role and the cost of compounding.

When you borrow money, you’ll also pay interest on top of the amount you borrowed.. Interest is the money the lender gets for loaning you the money. Read Next: 5 Subtly Genius Moves All Wealthy People ...