Inflation Calculator
Estimate how inflation changes purchasing power over time.
What inflation does to your money
Inflation raises prices, which is the same thing as saying it lowers what a given amount of money can buy. This inflation calculator projects forward: give it an amount today, an annual inflation rate and a number of years, and it shows what that same basket of goods will cost later — and how much extra you will need to find. It is the quickest way to sanity-check a long-term savings target or a salary expectation.
How to use the Inflation Calculator
- Enter the Present Value — today's price or today's amount.
- Enter an Inflation Rate (%); 2–3% is typical for developed economies, higher elsewhere.
- Set the number of Years.
- Read the future cost and the inflation impact — the extra money you will need.
Formula and a worked example
Future Value = Present × (1 + i)t
i is the annual inflation rate as a decimal and t is years. This gives future cost. To go the other way and find today's buying power of a future sum, divide instead of multiplying.
Worked example
Something costing 1,000 today, with inflation at 6% for 10 years, will cost 1,790.85 — you need 790.85 more for the same purchase. Flipped around, 1,000 tucked under a mattress for those 10 years would buy what 558 buys today.
Frequently asked questions
What is the difference between future cost and purchasing power?
Future cost multiplies by (1 + i)^t and tells you what a purchase will cost later. Purchasing power divides and tells you what future money is worth in today's terms. Both come from the same rate.
What inflation rate should I use?
Most central banks target around 2%. For long-term planning many people use 3% for developed economies and their own country's recent average elsewhere.
Does inflation cancel out my savings interest?
Partly. What matters is the real return — roughly your interest rate minus inflation. Interest of 6% with inflation at 6% leaves you standing still.
Why does a small rate matter over long periods?
Because it compounds. At 3%, prices roughly double in 24 years; at 6% they double in about 12.
Related calculators
Other tools people use alongside the inflation calculator.