Result
Real return
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Real return = ((1 + nominal return ÷ 100) ÷ (1 + inflation ÷ 100) − 1) × 100%. This is the Fisher equation — an exact way to account for inflation, unlike the rough approximation 'nominal return minus inflation', which produces a noticeable error at high values of either figure.
Real return shows how much money's purchasing power grew, not just its quantity: if nominal return equals inflation, real return is close to zero — the money grew in count but not in what it can buy.
If inflation exceeds nominal return, real return is negative — meaning the investment made a nominal profit, but the money's purchasing power still fell.