Free tool
Real return calculator
A 5% return with 3.7% inflation is a real return of only 1.25% (US inflation in September 2026: 3.7%, BLS). The real return shows how much purchasing power you actually gain.
How it is calculated
Real return = (1 + return) ÷ (1 + inflation) − 1. The common shortcut “return minus inflation” is close at low rates but gets inaccurate when rates are high. Purchasing power at the end = amount × (1 + return)years ÷ (1 + inflation)years.
Frequently asked questions
What is the real return?
The return after inflation, meaning the gain in purchasing power. If inflation is higher than the return, money loses value despite the interest.
Why not simply return minus inflation?
That is an approximation. The exact formula is (1 + return) ÷ (1 + inflation) − 1. At 5% and 3% that gives 1.94% instead of 2%.
Which inflation rate should I use?
For the past the measured rate, for the future your own assumption. The buttons insert the latest official annual rate – it is not a forecast.
Source
Inflation rates: U.S. Bureau of Labor Statistics (CPI-U, change from a year earlier, public domain) and Eurostat (HICP, prc_hicp_minr, reuse with attribution).
DESK is a research tool. This calculator shows arithmetic, not a recommendation: it is not investment, tax or financial advice, and past values say nothing about the future.
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DESK is a research tool and not investment advice. Page generated: 2026-10-15.