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Return on investment
Compare investment gain with the initial cost.
Calculators / Finance / Real rate of return
Real rate of return calculator
Calculate inflation-adjusted investment return and the real purchasing-power growth factor.
On this page
Real return4.76%
Real growth factor1.05×
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How to calculate
Calculate inflation-adjusted investment return and the real purchasing-power growth factor.
Real return = ((1 + nominal return) ÷ (1 + inflation) − 1) × 100.
Worked example
Nominal return (%): 10; Inflation (%): 5.
Real return: 4.76 %; Real growth factor: 1.05 ×.
Assumptions and limits
This is the exact Fisher relationship for the entered period. It excludes taxes, fees, cash-flow timing, and differences between personal inflation and the entered rate.
Results are rounded for display; calculations use unrounded values. Read our calculation methodology.
Understanding the result
Real return compares the growth factor of an investment with the growth factor of prices over the same period.
When this tool is useful
Convert a nominal return into a purchasing-power return.
Understanding your inputs
| Input | What to enter |
|---|---|
| Nominal return (%) | Enter a number of at least -99.99 and no more than 10000. |
| Inflation (%) | Enter a number of at least -99.99 and no more than 10000. |
Frequently asked questions
Why not simply subtract inflation?
Subtraction is an approximation. Dividing the two growth factors gives the exact relationship for the entered period returns.