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Inflation Calculator – Future Cost and Purchasing Power

See how inflation changes the value of money. Find what today’s prices will cost in the future, or what a sum of money will really be worth, at any average yearly inflation rate — with a year-by-year table.

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How to use the inflation calculator

  1. Enter an amount of money.
  2. Enter the average inflation rate you expect, or the average for a past period.
  3. Enter the number of years.
  4. Choose your question:
    • What will this cost in future? — how much the same goods will cost.
    • What will this money buy? — what the amount will be worth in today’s money.

The table shows the value at regular steps so you can see how quickly prices rise.

The inflation formulas

Future cost = Amount × (1 + i)^t
Value in today’s money = Amount ÷ (1 + i)^t

i is the yearly inflation rate as a decimal (3% = 0.03) and t is the number of years.

Worked example

At 3% inflation over 10 years:

  • A $1,000 shopping basket today will cost about $1,343.92.
  • $1,000 received in 10 years will only buy what about $744.09 buys today.
  • Prices rise 34.4% in total, and money loses about 25.6% of its buying power.

Over 24 years at 3%, prices roughly double: $100 today becomes about $203.

Why inflation matters for planning

  • Retirement: an income that feels comfortable today will need to be much larger in 25 years. The retirement calculator builds inflation in.
  • Savings: if your account pays 2% while inflation is 3%, your real return is about −1% a year.
  • Salary: a 3% raise in a year of 4% inflation is a pay cut in real terms.
  • Long-term goals: school fees, a house or a car will cost more by the time you buy.

Inflation around the world

Inflation is very different from country to country. In the euro area, the United States and the United Kingdom, central banks aim for about 2% a year. In many African and Asian economies, yearly inflation has often been well above that, and in some years it has reached double digits. That is why it is important to use a rate that fits your own currency and to look at your national statistics office’s consumer price index for the past period you care about.

Real return

To compare an investment against inflation, use the real return:

Real return = (1 + nominal return) ÷ (1 + inflation) − 1

A 7% return with 3% inflation gives a real return of about 3.9% a year. Model growth with the compound interest calculator or measure past performance with the ROI calculator.

Frequently asked questions

How do I calculate the effect of inflation?

Future cost = today’s cost × (1 + inflation rate)^years. To find what future money is worth today, divide instead: real value = amount ÷ (1 + inflation rate)^years.

What will $1,000 be worth in 10 years at 3% inflation?

Things that cost $1,000 today will cost about $1,343.92 in 10 years. Put the other way, $1,000 in 10 years will only buy what about $744.09 buys today — a 25.6% loss of purchasing power.

What inflation rate should I use?

Use an average that fits your country and time frame. Many central banks, including the US Federal Reserve, the European Central Bank and the Bank of England, target about 2% a year, but actual inflation varies — and is much higher in some countries. Check your national statistics office.

Does this calculator use official CPI data?

No. You enter the average rate yourself, so it works for any country, currency and period. For exact historic price changes, look up the consumer price index (CPI) published by your national statistics agency.

What is the rule of 70?

Divide 70 by the inflation rate to estimate how many years it takes for prices to double. At 3%, prices double in roughly 23 years; at 7%, in about 10 years.

How do I protect my savings from inflation?

Keep money for long-term goals where it can earn more than inflation, such as diversified investments, and look at inflation-linked bonds. Cash in a low-interest account loses purchasing power over time.

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