Say you need a simple estimation of a real interest rate. You have a monthly annual rate of a generic bond and the CPI index (non-seasonally adjusted), so then you would: a) Calculate the annual inflation rate, and do: (1+i_t)/(1+pi_t)-1; b) Calculate the annual inflation rate, take the average of the last X months, and do: and do: (1+i_t)/(1+av.pi_t)-1; c) Calculate the annual inflation rate, take the average of the next X months, and do: (1+i_t)/(1+av.pi_t)-1; d) Nah, all of these are wrong! I would... (please comment)