Inflation vs investment — real return calculator
See whether your investment actually grew in real terms after inflation ate into your returns
Investment returns are nominal (before tax and fees). The calculator compounds the assumed nominal return and each year’s CPI rate, then reports the annualized inflation-adjusted result. Subtracting inflation from a nominal percentage is only an approximation.
Illustrative 2000–2026 view. The calculator compounds the selected annual return and the CPI series, then annualizes the real result. Past performance does not guarantee future results; 2026 is a projection where marked.
How to use this tool
Nominal vs real returns — what's the difference?
A nominal return is the percentage your investment grew before inflation. If nominal return is 10% and inflation is 4%, the exact one-year real return is (1.10 ÷ 1.04) − 1 = 5.77%. Subtracting the rates (10% − 4% = 6%) is a useful approximation, but not exact.
This matters enormously over time. A savings account earning 2%/year while inflation runs at 3% is actually losing you money in real terms — your cash buys less every year even as the number in your account grows. Broad equity indexes have produced positive real returns over many long periods, but results depend on the selected dates, dividend treatment, fees, taxes, and CPI series. Always distinguish an illustrative constant-return scenario from a backtest of actual index total-return data.
Methodology
This tool compares a nominal investment return against the country's inflation rate for the same period, to reveal the real (inflation-adjusted) return — the genuine change in purchasing power your investment produced.
$10,000 at 10% nominal for 5 years, in a country averaging 4% inflation:
Nominal value: $10,000 × 1.10⁵ = $16,105. Real (inflation-adjusted) value: $16,105 ÷ 1.04⁵ = $13,230 — a real annual return of roughly 6%.
Benchmark returns are long-run historical averages for illustration; inflation series come from IMF/World Bank/BLS. See Data Sources for the full list, and our Disclaimer — this is not investment advice.