Real Return
Real return is investment return adjusted for inflation, measuring actual purchasing power gain rather than nominal percentage increase.
| Calculation | Formula |
| Real return | ((1 + Nominal return) / (1 + Inflation rate)) minus 1 |
| Approximation | Nominal return minus Inflation rate |
| Purchasing power | What return actually buys |
| Long-term focus | Critical for multi-decade investments |
| Example Comparison | Returns |
| Nominal return | 8% annual |
| Inflation rate | 3% annual |
| Real return (exact) | 4.85% |
| Real return (approx) | 5.0% |
| Interpretation | Purchasing power increased 4.85% |
Related Terms
RERA licensed advisors
Free expert advice
Get property recommendations matched to your goals. No pressure. No commitment.