What's the difference between real and nominal returns?

Nominal return is the raw percentage gain. Real return subtracts inflation to show actual purchasing power increase.

What inflation rate should I use?

Use actual historical rates for past calculations or expected rates (often 2-3%) for future projections.

Why does inflation matter for investing?

If your investment returns 5% but inflation is 3%, your real purchasing power only increased 2%.

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Inflation Calculator

Calculate the real value of investments adjusted for inflation

Investment Details

Current Amount ($)

Time Period (Years)

Inflation Rate (%)

Expected Nominal Return (% per year, optional)

Leave empty to see inflation impact on cash holdings

Understanding Inflation Impact

Inflation erodes the purchasing power of money over time. Even with positive investment returns, your real return (adjusted for inflation) may be lower than expected. Historical US inflation averages around 3% per year. To maintain purchasing power, investments should earn at least the inflation rate.

About Inflation Calculator

What is Inflation Calculator?

Calculate the real value of money and investments after accounting for inflation. Understand how purchasing power changes over time and what your returns really mean in today's dollars.

Features & Benefits

Calculate real vs nominal returns
Adjust for inflation rate
Future purchasing power projection
Historical inflation comparison
Investment return adjustment
Custom inflation rates

Frequently Asked Questions

What's the difference between real and nominal returns?: Nominal return is the raw percentage gain. Real return subtracts inflation to show actual purchasing power increase.
What inflation rate should I use?: Use actual historical rates for past calculations or expected rates (often 2-3%) for future projections.
Why does inflation matter for investing?: If your investment returns 5% but inflation is 3%, your real purchasing power only increased 2%.

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How-To Guides

How to Calculate Inflation-Adjusted Returns

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