Answer:
D. Subtract the rate of inflation from the nominal interest rate.
Step-by-step explanation:
You want to know how to calculate the real interest rate.
Real rate
The real interest rate is the rate of increase in value.
When inflation is non-zero, a positive inflation rate decreases value. That is a unit of currency purchases less than it did prior to the inflation. Since inflation robs value, the real interest rate is the difference between the nominal rate and the inflation rate.
To calculate the real interest rate, subtract the rate of inflation from the nominal interest rate.
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Additional comment
This is only an approximation. If "i" is the inflation rate, and "r" is the interest rate, the real interest rate is ...
(r -i)/(1 +i)