How to use
- Choose a direction.
- Future cost: what something that costs a given amount today will cost in N years — or how much you will need then to keep the same purchasing power.
- Today’s value: what an amount you will receive or save in N years is worth in today’s money.
- Enter the amount, an average annual inflation rate and the number of years. The result, cumulative inflation and change in purchasing power appear instantly.
- The table shows how prices rise — or value shrinks — year by year.
To bring a past amount up to today, use Future cost as well: 1,000 from 10 years ago is worth about 1,343.92 today if prices rose 3% a year on average.
How it’s calculated
π = average annual inflation, N = number of years.
| Item | Formula |
|---|---|
| Equivalent amount in N years | amount today × (1 + π)^N |
| Today’s value of a future amount | future amount ÷ (1 + π)^N |
| Cumulative inflation | (1 + π)^N − 1 |
| Change in purchasing power | 1 ÷ (1 + π)^N − 1 |
| Time for purchasing power to halve | ln 2 ÷ ln(1 + π), roughly 70 ÷ the inflation rate in percent |
Examples
| Situation | Result |
|---|---|
| 1,000 today at 3% inflation for 10 years | 1,343.92 needed for the same purchasing power (34.39% cumulative) |
| 1,000 received in 10 years, 3% inflation | worth 744.09 today (purchasing power down 25.59%) |
| 50,000 a year of expenses, 2.5% inflation, 20 years | about 81,931 a year |
| Purchasing power at 3% inflation | halves in about 23.4 years |
Even modest inflation adds up: cash left untouched for ten years at 3% inflation loses about a quarter of its buying power.
Things to keep in mind
- Results are for reference only. The calculator does not contain official price data; it applies the rate you enter evenly every year. For historical inflation, use official sources such as the US Bureau of Labor Statistics CPI or your country’s statistics office.
- The US Federal Reserve and many other central banks target 2% inflation over the longer run, but actual inflation can run well above or below target.
- Prices for housing, healthcare, education and food rise at different speeds, so your personal inflation rate may differ from the headline number.
- To build inflation into a savings plan, try the retirement calculator; to combine growth and discounting, use the future value calculator.
FAQ
What inflation rate should I use?
For long-term planning, 2% to 3% is a common starting point. Run a higher rate too, to see how sensitive your plan is.
Does interest protect me from inflation?
Only if your after-tax interest rate is higher than inflation. Earning 3% while prices rise 3% leaves your real purchasing power about the same.
Is anything I enter saved or sent anywhere?
No. All calculations run in your browser.