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Real Rate of Return Calculator

Strip inflation out of a nominal return with the exact Fisher equation, and see how far the simple subtraction is off.

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Real Rate of Return Calculator is free to use as often as you like, directly from this page. You will find it under Investing & markets, with Holding Period Return Calculator and Investment Return Calculator for the neighbouring cases.

How to use it

  1. Open the tool — no signup or install needed.
  2. Enter your input or adjust the available options.
  3. Get your result instantly, then copy or download it.

Frequently asked questions

What does Real Rate of Return Calculator do?

Strip inflation out of a nominal return with the exact Fisher equation, and see how far the simple subtraction is off.

When would I actually use this?

Comparing two investments that pay at different times, deciding whether a project clears its cost of capital, and sanity-checking a valuation someone else produced.

What is the most common mistake?

Trusting a valuation without asking what share of it comes from the terminal value. Past 70%, the answer is an assumption about the distant future dressed up as a calculation.

How is Real Rate of Return Calculator different from Holding Period Return Calculator?

They sit next to each other but answer different questions: Holding Period Return Calculator is the one to open when you need it to measure the total return over a holding period from the beginning and ending value plus any income, with the annualised equivalent. Pick whichever matches what you're starting from — both are free.

Is there a tool for the next step?

Investment Return Calculator is the closest one after this: Project a lump sum plus regular contributions, with the compounding frequency, the start-versus-end-of-period timing, inflation and tax.

What else is worth having open alongside it?

Inflation-adjusted return calculator and Forward Rate Calculator — they come up in the same task often enough to be worth a second tab.

Where do the figures come from?

Discounting, IRR and payback are defined identically everywhere, so the arithmetic is not in dispute — the assumptions you feed it are. Change the discount rate by a point and re-read the answer.

Further reading

All guides →
ExplainerHow Wrong Is Nominal Minus Inflation? Exactly One Year's Inflation WrongThe subtraction is not an approximation of the Fisher relation — it is the exact answer multiplied by (1 + i). At 8 percent nominal and 3 percent inflation the real return is 4.8544 percent, the shortcut says 5, and the error is exactly 3 percent of the answer. Always.ComparisonRegulated Savings, a Euro Fund or a Fixed-Term Deposit: the Ranking Inverts TwiceThe product paying the second-highest headline rate finishes last, and the reason is a tax change that took effect in January 2026. The three French savings vehicles scored on identical criteria: rate, tax, net return, real return, and what each one costs you in access.ComparisonLife Assurance or a Pension Plan: the Lock-Up Decides, Not the Tax BreakScore both wrappers on the same rows and the pension plan wins the arithmetic at almost every horizon and almost every combination of tax rates — including when the rate does not fall at all. Which is exactly why the deduction is the wrong thing to decide on.ComparisonReal vs Nominal Return: Why Subtracting Inflation Is the Wrong AnswerAt 7 percent nominal and 3 percent inflation the real return is 3.883 percent, not 4. The Fisher equation divides, it does not subtract — and over 30 years the shortcut overstates a $10,000 pot by $1,072.ExplainerWhat an Investment Return Number Is Not Telling YouA fund can return 9.49 percent a year while its investor earns −1.77 percent. Time-weighted versus money-weighted, nominal versus real, gross versus net — four questions inside one number, separated with arithmetic.ExplainerWhat Is a Funding Rate? The Recurring Cost of Holding a PerpetualFunding is paid every eight hours on the full notional, between traders rather than to the exchange. A rate of 0.01 percent looks like nothing and costs 10.95 percent a year. Here is the formula and an annualised table.