When to use this calculator
Adjust a nominal investment return for inflation. Both rates must refer to the same period; fees and taxes are not included.
Explore the investment return calculators for other questions in this topic. For a related calculation, use the Down Payment Calculator: Calculate a property deposit amount from a chosen percentage of price.
PUTTING IT INTO PRACTICE
Real Return: a worked example
The values below are an illustrative example, not a recommendation. Replace them with measurements or assumptions that match your question.
| Input | Example value |
|---|---|
| Nominal annual return (%) | 7 |
| Annual inflation (%) | 3 |
| Result | 3.883495 % |
- Check the input labels and enter the example values above.
- Apply the relationship: Real return (%) = ((1 + return/100)/(1 + inflation/100) − 1) × 100.
- The result is 3.883495 %, rounded for display.
How to interpret your result
Both rates must refer to the same period; fees and taxes are not included.
Return measures must cover the same time period before comparison. CAGR annualises two endpoint values but does not model interim cash flows. Current income yield differs from total return or yield to maturity.
Frequently asked questions
Can CAGR handle money added during the period?
The simple endpoint CAGR model does not account for intermediate deposits and withdrawals. Those require cash-flow-aware methods.
How do I use the real return calculator?
Enter nominal annual return (%), annual inflation (%). The result updates automatically. Use the units shown beside each input; the example values illustrate the method.
Which formula does this calculator use?
Real return (%) = ((1 + return/100)/(1 + inflation/100) − 1) × 100.
What should I check before using the result?
Both rates must refer to the same period; fees and taxes are not included.
How are results rounded?
Scalar numbers display up to six decimal places, with scientific notation for very large or small values. Text, fraction, date and schedule outputs use the format described on the tool. Intermediate calculations use JavaScript floating-point arithmetic. Keep sensible precision for your measurements.
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