So I have my investment Plan set in March 2019, with initial portfolio value of 250.000€, annual return 11% and long-term inflation rate at 1.5%.
As you can see in column A, I have Capital BoP, Estimated Returns in Column B and Capital EoP in column C.
Column A (except for the first value which is assumed to be 250.000€) is calculated easily as B+C (of previous periods) Column B is calculated as A*(11%-1.5%) Column C is A+B
However, I am not sure the formula for adjusting for inflation is correct like that, because we know that the real rate of return is (1+return)/(1+inflation)-1 But I also remember from my studies that this is the formula for the actual inflation, not for the long term inflation, which is fixed from day 1 to infinite.
So my question is simple: how would you calculate the estimated return for each period?