Inflation-Adjusted Return Calculator
True purchasing power.
Inflation-Adjusted Return Calculator
Real Return = (nominal - inflation) / (1 + inflation) x 100
Calculated instantly
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What This Calculator Does
The Inflation-Adjusted Return Calculator converts nominal investment returns into real returns that account for inflation. A 7% return with 4% inflation means your purchasing power only grew by about 3%.
How It Works
The real return equals the nominal return minus the inflation rate, divided by (1 + inflation rate), times 100. This Fisher equation adjustment gives you the true growth in purchasing power.
Example
Your investment returned 8% nominal but inflation was 3.5%. Real return = (8 - 3.5) / (1 + 3.5/100) x 100 = 4.35%. Your purchasing power grew by 4.35%, not 8%.
Formula
Real = (nominal - inflation) / (1 + inflation) x 100Reading the Results
Real Return
Your actual increase in purchasing power after inflation is accounted for.
Frequently Asked Questions
Why does inflation matter for returns?
Inflation erodes purchasing power. A 5% return with 5% inflation means zero real growth.
What is a good real return?
Historically, the S&P 500 averages about 7% nominal, giving roughly 4-5% real return after inflation.
Can real returns be negative?
Yes. If inflation exceeds your nominal return, you are losing purchasing power even if the account balance grows.