How to calculate an inflation-adjusted return
Enter the nominal annual return and the annual inflation rate for the same period. The result is a percentage: the change in purchasing power after accounting for rising prices. This tool does not calculate a past or future dollar amount and does not retrieve historical inflation data.
The exact formula is real return = ((1 + nominal return / 100) / (1 + inflation / 100) − 1) × 100. With an 8% nominal return and 3% inflation, the real return is about 4.85%, rather than the 5% obtained by simple subtraction.
Reading the result
A positive real return means purchasing power increased under the entered assumptions. A negative real return means prices rose faster than the investment value. Both rates need to describe the same period; comparing a monthly return with annual inflation produces a misleading answer.
This calculation excludes investment fees and taxes. Use a net nominal return if you want those effects reflected, and avoid deducting the same cost twice. A constant rate is a scenario assumption, not a prediction of market returns or future inflation.
Need a money-value projection?
For an amount growing with inflation over a chosen number of years, use the Inflation Calculator. For contributions and compound investment growth, use the Investment Calculator. The real-return percentage here answers a different question: how much purchasing power a nominal return represents.