In short
Inflation is the rise in prices over time. This calculator shows two sides of it: how much something that costs a given amount today will cost in future, and how much less the same amount of money will buy.
How inflation compounds
Prices rise on top of last year's rises. Future cost = amount × (1 + inflation)^years. Purchasing power works the other way: amount ÷ (1 + inflation)^years.
Worked example
At 3% a year, something that costs 1,000 today will cost 1,343.92 in 10 years. Put the other way, 1,000 kept in cash will buy only what 744.09 buys today.
At 6% inflation the same item would cost 1,790.85 in 10 years.
The rule of 70
Divide 70 by the inflation rate to estimate how many years prices take to double. At 3%, prices double in about 23 years; at 7%, in about 10 years.
Protecting your money
Money in an account paying less than inflation loses value every year. Compare savings rates and investment returns with inflation, and raise long-term goals such as retirement by the inflation you expect.
Frequently asked questions
What inflation rate should I use?
Your country's recent consumer price inflation is a good start; many central banks aim for about 2%. For long periods, try a few rates to see the range.
Does every price rise at the same rate?
No. Some costs, such as education or health care, often rise faster than average, while others fall. Use a rate that fits what you are planning for.
Can I see past inflation?
This calculator uses a steady rate you choose. For actual past prices, use your national statistics office's inflation data.
What does purchasing power mean?
It is what an amount of money can buy. If prices double, the same money buys half as much.
Methodology
Future cost = amount × (1 + i)^t and purchasing power = amount ÷ (1 + i)^t, where i is the yearly inflation rate and t the number of years. Values are rounded for display only.
This calculator gives estimates for information only and is not financial advice. Actual inflation varies over time.
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