Inflation Calculator: Future Cost and Purchasing Power
Find out what today's prices will cost in the future and how much your money will really be worth after inflation.
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https://fastbuysale.com/tools/inflation-calculator/Share result on WhatsAppEnter an amount, an average yearly inflation rate and the number of years to see the future cost, the lost purchasing power and the equivalent value in today's money.
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▶ Get the FastBuySale appHow to use the Inflation Calculator
- Enter an amount of money or the price of something today.
- Type the average yearly inflation rate you expect.
- Enter the number of years.
- Read the future cost, the purchasing power of the same amount and the yearly table.
Guide
The formula
Inflation compounds just like interest. The future cost of something that costs P today is P × (1 + i)n, where i is the yearly inflation rate as a decimal and n is the number of years. The purchasing power of money you hold unchanged is the reverse: P ÷ (1 + i)n. Even modest inflation adds up: at 3% a year prices roughly double in 24 years.
Worked example
A basket of groceries costs 100 today. With 3% inflation it will cost about 134.39 in ten years. Meanwhile 100 kept in cash will buy only what 74.41 buys today, a loss of about a quarter of its value. At 6% inflation the same groceries cost 179.08 after ten years and the cash keeps just 55.84 of its purchasing power.
Why inflation matters for planning
Salaries, savings goals, retirement income and rent agreements should all be checked against inflation. A pay rise below the inflation rate is effectively a pay cut. A savings account that pays less than inflation loses value in real terms. When you plan for a goal ten or twenty years away, such as education or retirement, inflate today's cost first, then use the compound interest or retirement calculator to plan contributions.
Which rate to use
Central banks in many countries target about 2% a year, but actual inflation varies widely by country and period, and some categories such as education, health care and housing often rise faster than the average. Use your national statistics office's consumer price index for history, and test a range such as 2%, 4% and 6% to see how sensitive your plans are.
Protecting your money
Investments that tend to grow faster than inflation over long periods, such as diversified equities, inflation-linked bonds or property, can help preserve purchasing power, though each carries risk. All calculations here run privately in your browser.
Key terms
- Inflation rate
- The yearly percentage increase in the general price level, usually measured by a consumer price index.
- Consumer price index (CPI)
- An official index that tracks the cost of a typical basket of goods and services over time.
- Purchasing power
- How much a fixed sum of money can actually buy; it falls as prices rise.
- Real value
- An amount expressed in today's money after removing the effect of inflation.
- Deflation
- A general fall in prices, entered here as a negative inflation rate.
- Real interest rate
- The interest you earn minus inflation, which shows whether your savings truly grow.
Frequently asked questions
How long does it take for prices to double?
Divide 72 by the inflation rate. At 3% prices double in about 24 years; at 6% in about 12 years.
What is purchasing power?
It is how much goods and services a fixed amount of money can buy. Inflation reduces it over time.
Can I calculate deflation?
Yes, enter a negative rate such as −1 to see prices falling.
Is inflation the same in every country?
No. Rates differ widely by country and year; use your local consumer price index.
Does this use official historical data?
No, it uses the average rate you enter, so it works for any country and any future period.