Investors use rate of return to understand the earnings or losses on an investment in a specified period of time. Learn more about how it’s calculated.

The Formula for the Nominal Rate of Return Is ... The after-tax rate of return of an investment takes the effect of taxation on the investment's returns into account.

If the nominal rate is 20% and the applicable tax rate is 15%, the after-tax return is 17%. The calculation is 0.20 x (1 - 0.15) . You can then adjust the 17% rate for inflation using the real ...

For example, inflation in March 2022 reached 8.5%, when nominal rates on Treasury bonds were about 2.5%, which means those bonds yielded a real rate of return of -6.0% if inflation remained steady ...