Inflation-Adjusted Return Calculator
Calculate real returns considering inflation impact on your investments
Investment Details
Typical: Equity 10-15%, FD 6-8%, Gold 8-10%
India average: 5-7% | Historical range: 3-10%
Why This Matters:
Inflation erodes purchasing power. A 10% return with 6% inflation = only 3.77% real gain!
Nominal Returns (Before Inflation)
Real Returns (After Inflation)
Detailed Analysis
Nominal vs Real Returns
Key Insight:
Inflation reduces your ₹3,10,585 to just ₹1,73,429 in purchasing power - a loss of 44.2%!
Understanding Real Returns
Nominal Return is the percentage increase in your investment without considering inflation. If you invest ₹1,00,000 at 12% for 10 years, you'll have ₹3,10,585.
Real Return adjusts for inflation to show the actual increase in purchasing power. With 6% inflation, your real return is only 5.66% annually, not 12%!
Formula: Real Rate = [(1 + Nominal Rate) ÷ (1 + Inflation Rate)] - 1
Example: [(1.12) ÷ (1.06)] - 1 = 0.0566 or 5.66%
Why Inflation Matters
- •A 6% FD return with 6% inflation = 0% real growth (just maintaining purchasing power)
- •Over 20 years, 6% inflation reduces your money's value by 70%
- •Always invest where returns exceed inflation - aim for 3-4% above inflation
- •Equity has historically beaten inflation by 5-8% annually in India
- •Consider inflation when planning retirement - what costs ₹50K today will cost ₹1.6L in 20 years!