Compound interest taking inflation into account

[Mac50]

I am interested to know whether there is a compound interest formula which takes inflation into account. I am familiar with the compound interest formula.

The type of calculation I'm looking to do is

Monthly investment of: $250
Annual interest rate: 4%
Annual inflation rate: 3%
Period of investment: 40 years

Hoping someone can help. Thanks.
Mac

 

[chocomel]

Ill assume Annual interest rate = APR compounded monthly

Effective interest per year is: (1+(0,04/12)^12) = 4,0741%

Inflation: 3%

1+Real return = (1+Effective interest)/(1+Inflation) = 1,040741/1,03

1+Real return = 1,0104281
Real return = 1,04281%

You can use this rate in your formula just like you use the interest rate.