Inflation Adjusted Return Calculator
This calculator computes nominal and real annualized returns from an initial investment and a projected future value, and it converts the projected future value into today's dollars using an input annual inflation rate. Use it to estimate how inflation erodes purchasing power and to compare investments on a real (inflation‑adjusted) basis.
Enter the initial amount, expected future value at the end of the holding period, the number of years, and an annual inflation rate (percent). The tool reports the nominal annualized return, the real annualized return after inflation, and the inflation‑adjusted future value expressed in present‑day terms.
Governance
Record a350b1fa1b8c • Reviewed by Fidamen Standards Committee
Inputs
Results
Nominal annualized return
8.45%
Real (inflation‑adjusted) annualized return
6.32%
Future value in today's dollars (inflation‑adjusted)
$13,585.96
Cumulative nominal return (%)
5000.00%
| Output | Value | Unit |
|---|---|---|
| Nominal annualized return | 8.45% | — |
| Real (inflation‑adjusted) annualized return | 6.32% | — |
| Future value in today's dollars (inflation‑adjusted) | $13,585.96 | USD |
| Cumulative nominal return (%) | 5000.00% | — |
Visualization
Methodology
Nominal annualized return is calculated by converting the total growth factor to a per‑year rate using the nth root: (FV / PV)^(1 / years) - 1.
Real (inflation‑adjusted) annualized return uses the Fisher adjustment: (1 + nominal) / (1 + inflation) - 1, where inflation is entered as an annual percentage and converted to decimal form in calculations.
Inflation‑adjusted future value is computed by discounting the nominal future value by the compounded inflation factor: FV / (1 + inflation)^years. This returns the amount of purchasing power in today's dollars.
Key takeaways
This tool provides quick visibility into nominal and real returns and how inflation affects purchasing power over time. Use conservative inflation estimates for stress tests and compare multiple scenarios to understand sensitivity.
Worked examples
Example 1: PV = 10,000; FV = 15,000; years = 5; inflation = 2% → nominal ≈ 8.45% annually; real ≈ 6.24% annually; inflation‑adjusted FV ≈ 13,600 in today's dollars.
Example 2: PV = 50,000; FV = 100,000; years = 10; inflation = 3% → nominal ≈ 7.18% annually; real ≈ 3.99% annually; inflation‑adjusted FV ≈ 74,409 in today's dollars.
F.A.Q.
Should I enter inflation as a percent or decimal?
Enter inflation as a percentage (for example, enter 2 for 2%). The calculator converts percentage inputs to decimals internally by dividing by 100.
Can I use this calculator for short time periods or negative inflation?
Yes. Years can be fractional for sub‑year periods. Negative inflation (deflation) is allowed within the field limits, but interpret results carefully because high negative or very large inflation values can produce counterintuitive outcomes.
How precise are the results and what are the limitations?
Results are mathematical estimates based on the inputs and the formulas shown. Rounding, floating point representation, and input accuracy affect outputs. This calculator is for informational purposes and not financial advice. See the accuracy and standards section for numeric and security considerations.
What if I only know a nominal annual rate and want the real rate?
If you have a nominal annual rate r (in percent), convert to decimal r/100 and use real = (1 + r/100) / (1 + inflation/100) - 1. This tool derives nominal rate from PV, FV, and years when those are provided.
Sources & citations
- NIST — Numerical computation and software guidance — https://www.nist.gov
- ISO — Risk management and measurement standards (ISO) — https://www.iso.org
- IEEE — Floating point and numeric representation best practices — https://www.ieee.org
- OSHA — Data handling and labelling guidance (workplace safety principles) — https://www.osha.gov
- SEC — Securities and Exchange Commission Yield Calculation Guidance — https://www.sec.gov/rules/proposed/482.txt
- FINRA — Fixed Income and Bonds — https://www.finra.org/investors/investing/investment-products/bonds
- U.S. Treasury — Treasury Securities — https://www.treasurydirect.gov/marketable-securities/
Further resources
Related tools
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
Record ID: a350b1fa1b8cWhat changed (latest)
v1.0.0 • 2025-11-26 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
What changed (latest)
v1.0.0 • 2025-11-26 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Engine
v1.0.0
Data
Baseline (no external datasets)
Content
v1.0.0
UI
v1.0.0
Governance
Last updated: Nov 26, 2025
Reviewed by: Fidamen Standards Committee (Review board)
Credentials: Internal QA
Risk level: low
Reviewer profile (entity)
Fidamen Standards Committee
Review board
Internal QA
Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person
Semantic versioning
- MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
- MINOR: New features or fields that do not change existing outputs for the same inputs.
- PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.
Review protocol
- Verify formulas and unit definitions against primary standards or datasets.
- Run golden-case regression suite and edge-case suite.
- Record reviewer sign-off with credentials and scope.
- Document assumptions, limitations, and jurisdiction applicability.
Assumptions & limitations
- Uses exact unit definitions from the Fidamen conversion library.
- Internal calculations use double precision; display rounding follows the unit's configured decimal places.
- Not a substitute for calibrated instruments in regulated contexts.
- Jurisdiction-specific rules may require official guidance.
Change log
v1.0.0 • 2025-11-26 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: 8ed99ec76221