Finance
Adjust a return for inflation
=(1+B1)/(1+B2)-1How it works in Excel
- B1 is the return you earned.
- B2 is inflation.
- Format the cell as a percentage.
- Subtracting inflation gets close, but this version is exact.
The idea in general
If prices rise too, your money buys less than the raw return suggests.
What I assumed
- The return is in B1 and inflation is in B2.
Check the result on your own data before relying on it.