Real Return Calculator
See how inflation changes the purchasing power of an investment's return. This is a mathematical illustration of the nominal-return and inflation assumptions you enter, not a prediction of actual future returns.
Your assumptions
Adjust the amounts below to see how the inflation-adjusted return changes.
In rupees, today.
A neutral assumption you choose — not a forecast or a promised return.
A neutral assumption you choose — not a forecast of actual future inflation.
Your estimate
₹10,00,000 at an assumed 10% nominal return over 10 years illustrates a nominal future value of ₹25,93,742. Adjusted for an assumed 6% inflation, that is worth about ₹14,48,332 in today's purchasing power — an inflation-adjusted return of 3.77% p.a. This is a mathematical illustration of the assumptions entered, not a prediction of actual future returns.
₹10,00,000 at an assumed 10% nominal return, with 6% assumed inflation, over 10 years — illustrates a nominal future value of ₹25,93,742, worth about ₹14,48,332 in today's purchasing power, an inflation-adjusted (real) return of about 3.77% p.a. This is a mathematical illustration of two assumptions, not a prediction of actual future returns.
Try changing the nominal return or inflation assumption to see how the real return changes — see the Inflation Calculator next to project a specific cost forward.
Learn about this calculator
Shows how inflation changes the purchasing power of an investment's nominal (headline) return, using the Fisher equation.
An investment's headline, or nominal, return doesn't tell the whole story — inflation erodes purchasing power over the same period. This calculator combines an assumed nominal return with an assumed inflation rate to show the inflation-adjusted (real) return, alongside the nominal future value and what that amount is worth in today's rupees.
How it works
It compounds the starting amount forward at the entered nominal return, then deflates that nominal future value by the entered inflation rate to find its worth in today's purchasing power — the real return rate is derived from the same two assumptions using the standard Fisher equation.
What each input means
- Starting investment
- The amount invested today, in rupees.
- Expected nominal return
- The headline annual return you assume — a neutral assumption you choose, not a forecast or a promised return.
- Expected inflation
- A neutral annual inflation assumption you choose — not a forecast of actual future inflation.
- Period
- The number of years the amount is assumed to grow for.
What the results mean
- Estimated real (inflation-adjusted) return
- The nominal return adjusted for the assumed inflation rate — what the return is worth in terms of actual purchasing power, per year.
- Nominal future value
- The starting amount compounded at the nominal return alone, with no inflation adjustment.
- Inflation-adjusted value
- The nominal future value restated in today's purchasing power, after deflating it by the assumed inflation rate.
Assumptions
- Both the nominal return and inflation are assumed to apply at one constant rate every year for the whole period — real returns and real inflation both vary year to year.
- Taxes, costs, and cash-flow timing are not modelled.
Limitations
- This calculator does not predict actual future returns or actual future inflation — both are assumptions you enter, and results can differ substantially from reality.
- It does not account for volatility — actual investment returns fluctuate year to year rather than compounding smoothly at one constant rate.
Common mistakes
- Comparing a nominal return quoted by one investment against a real (inflation-adjusted) return quoted by another — always compare like with like.
- Assuming a positive nominal return always means growing wealth — if inflation exceeds the nominal return, purchasing power actually falls.
Example
For example, ₹10,00,000 at an assumed 10% nominal return, with 6% assumed inflation, over 10 years illustrates a nominal future value of about ₹25.9 lakh, worth about ₹14.5 lakh in today's purchasing power — a real return of about 3.77% p.a.
FAQ
What's the difference between nominal return and real return?
Nominal return is the headline percentage before adjusting for inflation. Real return adjusts that figure for inflation, showing what the return is worth in actual purchasing power.
Why can real return be negative even when nominal return is positive?
If inflation is higher than the nominal return, the money grows in rupee terms but loses purchasing power, so the inflation-adjusted return works out negative.
If you'd like to project a specific future cost (like a goal or an expense) forward under an inflation assumption, see the Inflation / Future Cost Calculator next.
For illustration only. Not investment advice. Mutual fund investments are subject to market risks; read all scheme related documents carefully. Returns assumed are hypothetical and not guaranteed.