Real rate of return

(redirected from Inflation Adjusted Return)

Real rate of return

The percentage return on some investments that has been adjusted for inflation.

Real Rate of Return

The rate of return on an investment after adjusting for inflation. It is calculated simply by taking the gross return and subtracting the inflation rate. For example, if the return on an investment is 7% and the inflation rate is 4%, the real rate of return is 3%.

Real rate of return.

You find the real rate of return on an investment by subtracting the rate of inflation from the nominal, or named, rate of return.

For example, if you have a return of 6% on a bond in a period when inflation is averaging 2%, your real rate of return is 4%. But if inflation were 4%, your real rate of return would be only 2%.

Finding real rate of return is generally a calculation you have to do on your own. It isn't provided in annual reports, prospectuses, or other publications that report investment performance.

References in periodicals archive ?
Finally, China committed to promote more market-based interest rates, which should over time increase household income and consumption by increasing the inflation adjusted return on household savings, which still largely remain in bank deposits.
Malaysia, whose EPF is the seventh largest pension fund, has $200 billion (Dh734 billion) in its fund from 14 million workers, which gives inflation adjusted returns.