## About This Tool

The online Real Rate of Return Calculator is used to calculate the real rate of return.

## Real Rate of Return Definition

The real rate of return is the rate of return on an investment after adjusting for inflation.

## Formula

The real rate of return calculation formula (known as Fisher equation) is as following:

r = (1 + n)/(1 + i) - 1

where

r = real rate of return

n = nominal rate of return

i = inflation rate

For example, if you have a nominal rate of return of 6% on a investment in a period when inflation is averaging 2%, your real rate of return is 3.922%.