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Inflation Calculator
Inflation Calculator
Calculate the future value of money or see how purchasing power has declined
$0
Future Cost of Same Goods
Based on compounding inflation
Total Increase
0%
Purchasing Power
$0
Cumulative Loss
$0
Purchasing Power Erosion
About the Inflation Calculator
Inflation reduces what your money can buy. See how much today's amount would need to grow to keep the same purchasing power, or what it will be worth in the future.
How to use the Inflation Calculator
- Enter the Amount ($).
- Enter the average Inflation Rate (%) and the Number of Years.
- Press Calculate Impact to see the future cost and the reduced purchasing power.
Formula and method
Future cost: FV = P × (1 + i)ⁿ. Purchasing power today: P ÷ (1 + i)ⁿ.
Worked example
At 3% inflation, something that costs $1,000 today will cost about $1,344 in 10 years. Alternatively, $1,000 in 10 years will only buy what about $744 buys today.
Buying power over 20 years. At 3% inflation a year, 100 today will buy only about 55 worth of goods in 20 years, since 100 ÷ 1.0320 ≈ 55.37.
When to use the Inflation Calculator
- Seeing how much your money will be worth in the future.
- Working out what a past price would be in today's money.
- Checking whether a salary raise really beats rising prices.
Common mistakes to avoid
- Using a single average inflation rate for every kind of spending. Housing, food and healthcare can rise at different speeds.
- Forgetting that savings earning less than inflation lose buying power.
Tips
- Use a long-term average, not one unusual year.
- Savings that earn less than inflation lose purchasing power.
Frequently Asked Questions
Many central banks target about 2 percent a year, though actual rates vary by country and year.
Central banks in many countries aim for about 2% a year, but real rates vary by country and year.
Your investment return after subtracting inflation. If you earn 5% and inflation is 3%, your real return is about 2%.