Inflation
What inflation is, how it is measured and how it eats into purchasing power.
Inflation is a sustained rise in the general price level. When prices rise, the same amount buys less: the purchasing power of money falls.
The most common measure is the consumer price index (CPI): the cost of a typical basket of goods and services compared with an earlier period.
The real return is the return adjusted for inflation. A deposit at 12% with 8% inflation increases purchasing power by only about 3.7%.