Enter the nominal return and the inflation over the same time period to calculate the real return.

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## Real Return Formula

The following formula is used to calculate the real return.

rR = NR – I

- Where rR is the real return (%)
- NR is the nominal return (%)
- I is the inflation (%)

## Real Return Definition

A real return is defined as the nominal return of an investment or asset minus the inflation over the same time period.

## Real Return Example

How to calculate real return?

**First, determine the nominal return.**Calculate the nominal return of the investment. For this example, we will say the return is 25%.

**Next, determine the inflation rate.**Measure the inflation rate over the same time period. For this example, we will say inflation is 3%.

**Finally, calculate the real return.**Using the formula we find the real return to be 25% – 3% = 22%.

## FAQ

**What is a real return?**

A real return is the return on an investment after inflation is taken into account.