Real Return Calculator

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

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?

  1. First, determine the nominal return.

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

  2. Next, determine the inflation rate.

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

  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.



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real return formula