What is the relationship between different types of interest rate?

Interest means the amount which a lender gets against the money lent. While interest is rate represents  the ratio between interest and the amount  lent. There are two types of interest rates 

• Real interest rate
• Nominal interest rate

The rate of  interest where inflation is not considered is called nominal interest rate while includes the expected changes in price level is called real interest rate , but such interest rate represents the real cost of borrowing

Relationship between  Real and Nominal Interest Rate 

According to Irving Fisher ,the nominal interest rate (i) is equal to real interest rate (ir)and expected rate of inflation 

i =ir +expected rate of inflation