About the Inflation-adjusted return calculator
Money loses purchasing power as prices rise. The real return is what an investment earns after allowing for that loss, which is the return that actually changes what you can buy.
How the Inflation-adjusted return calculator works
Real return = (1 + return) ÷ (1 + inflation) − 1
The calculator grows the amount at the return you enter, then divides by the rise in prices over the same years to express it in today’s rupees.
Subtracting inflation from the return is a close shortcut at low rates, but the exact formula above is used here.
Worked example
- Investment amount
- ₹1,00,000
- Expected annual return
- 12%
- Annual inflation
- 6%
- Time period
- 10 years
Example inputs
- Inflation-adjusted annual return
- 5.66%
- Value in today’s rupees
- ₹1,73,428.94
- Future value before inflation
- ₹3,10,584.82
Calculated result
Why use a Inflation-adjusted return calculator?
- Compare returns from different periods with different inflation.
- See whether a fixed return keeps up with prices.
- Plan in today’s rupees rather than future rupees.
Inflation-adjusted return calculator FAQs
Why not just subtract inflation from the return?
Because the two compound together. With 12% return and 6% inflation, the real return is a little under 6%. The difference grows at higher rates.
Can the real return be negative?
Yes. If inflation is higher than the return, the money buys less at the end than at the start, even though the rupee amount grew.
Which inflation rate should I use?
Your own assumption. India’s headline rate is the consumer price index (CPI) published by the National Statistics Office, but your own costs may rise faster or slower.
Are taxes included?
No. Tax on returns lowers the real return further.