Bond Yield vs Inflation Calculator
Enter the nominal yield, inflation rate, amount, term and tax rate.
Real yield after inflation
β
Enter values above
Nominal value at end
β
Real value at end
β
Purchasing power lost
β
After-tax nominal value
β
After-tax real value
β
Worked example
With the default inputs shown below, this calculator returns the following results:
| Input | Value |
|---|---|
| Nominal bond yield (%) | 4.5 |
| Inflation rate (%) | 3 |
| Investment amount ($) | 10000 |
| Years | 10 |
| Tax rate on interest (%) | 20 |
| Result | Value |
|---|---|
| Real yield after inflation | 1.46% |
| Nominal value at end | $15,530 |
| Real value at end | $11,556 |
| Purchasing power lost | $3,974.14 |
| After-tax nominal value | $14,424 |
| After-tax real value | $10,733 |
Values shown are produced by this page in your browser; change any input to update them.
How to use the Bond Yield vs Inflation Calculator
- Nominal bond yield (%) β default 4.5
- Inflation rate (%) β default 3
- Investment amount ($) β default 10000
- Years β default 10
- Tax rate on interest (%) β default 20
- Press Calculate to update the results instantly.
Frequently asked questions
Subtracting gives a close approximation, but the exact real return is (1 + nominal) Γ· (1 + inflation) β 1. Over long periods the difference compounds into a meaningful gap.
Historically, long-run real returns on developed-market government bonds have been around 1β2%. Anything materially above that implies either higher risk or a favourable starting yield.
Tax is charged on the nominal interest, not on the inflation-adjusted gain. That means a bond can lose purchasing power after tax even when the real pre-tax return is positive.