Inflation Calculator
Free inflation calculator. See how inflation raises future costs and erodes the buying power of money over a number of years at any average annual rate.
Inflation Details
Future Cost
$1,343.92
Breakdown
How It Works
Enter an amount
Type a price or sum of money you want to project, such as the cost of an item or your savings today.
Set the inflation rate
Enter the average annual inflation rate to assume. A long-run figure of around 3% is a common default.
Choose the number of years
Pick how many years into the future to project, then read off the future cost and lost buying power.
Inflation is the gradual rise in the general level of prices, which steadily reduces what each dollar can buy. Even a modest, steady rate compounds dramatically over long periods, which is why money kept idle loses real value and why long-term plans for savings, retirement and major purchases must account for it.
This calculator makes inflation concrete. Enter an amount, an assumed average annual rate and a number of years to see both the future cost of something priced at that amount today and the eroded buying power of that future sum in today's money, along with the cumulative inflation over the period.
Frequently Asked Questions
How does inflation change the value of money?
Inflation means prices rise over time, so the same amount of money buys less in the future. An amount that costs a certain sum today will cost amount × (1 + rate)^years later, while the buying power of a future amount measured in today's money is amount / (1 + rate)^years.
What inflation rate should I use?
Historical long-run inflation in many developed economies has averaged roughly 2% to 3% per year, which is why 3% is a sensible default. For specific planning, use your country's recent CPI figures or a central-bank target.
What is cumulative inflation?
Cumulative inflation is the total percentage increase in prices over the whole period, found with (1 + rate)^years − 1. At 3% per year for 10 years, cumulative inflation is about 34%, even though the annual rate is only 3%.
What is the difference between future cost and buying power here?
Future cost shows how many dollars you will need later to buy what costs the entered amount today. Buying power shows how little that same future amount of dollars would actually purchase when expressed in today's money.
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