Inflation input
Choose an index and period that match the return.
Use inflation for the same period and geography as the nominal return. A broad consumer-price index is an average and may not match your personal spending pattern.
Inflation adjustment
Real Return Calculator
Convert a nominal investment return into an inflation-adjusted return and purchasing-power value.
Exact real return—
Nominal ending value—
Inflation-adjusted value—
Value in starting-period money
Real gain or loss—
Purchasing-power multiple—
Nominal minus inflation approximation—
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Formula
Real return = (1 + nominal return) ÷ (1 + inflation rate) − 1. Direct subtraction is only an approximation.
Interpretation
Nominal growth is not the same as purchasing-power growth.
If an investment rises while consumer prices also rise, part of the nominal gain compensates for the higher cost of goods and services.
Sources
Inflation reduces purchasing power.
Investor.gov defines real return as return after accounting for inflation and taxes. The calculator isolates the inflation adjustment and explicitly excludes tax.