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Inflation-Adjusted Return Calculator

Convert a nominal investment return into a real, inflation-adjusted return.

Nominal return

Inflation rate

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How it works

Real return = (1 + nominal) ÷ (1 + inflation) − 1

The number your account shows is nominal; what matters is real return — growth after inflation. Simply subtracting inflation is close, but the exact formula divides the growth factors and is slightly lower.

Worked example

8% nominal with 3.5% inflation is a real return of about 4.35% (the rough subtraction gives 4.5%).

Frequently asked questions

Why not just subtract?

Subtraction is a good approximation but slightly overstates the real return; dividing the growth factors is exact.

Why does real return matter?

It shows whether your money is actually gaining buying power. A high nominal return in high inflation can be a small real gain.

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Educational estimate, not investment advice. Returns are assumptions, not guarantees — markets fluctuate and past performance does not predict the future.