What inflation rate should I use?

Check your country's official statistics agency for historical inflation data and use a long-term average relevant to your planning horizon.

Does this calculator predict future inflation?

No, it applies whatever rate is entered consistently across the period. It is a projection based on an assumption, not a forecast.

What's the difference between "Future Cost" and "Purchasing Power"?

Future Cost is what today's amount will likely cost later. Purchasing Power is what today's amount will effectively be worth, in today's money, if held as cash.

Inflation Calculator

See how inflation affects the value of money over time

Current Amount ($)

Average Annual Inflation Rate (%)

Number of Years

yrs

What is the Inflation Calculator?

Inflation is the rate at which prices for goods and services rise over time, which steadily erodes the purchasing power of money. The Inflation Calculator shows two things at once: what an item priced at today's amount will likely cost in the future, and what that same amount of money — left as cash, un-invested — will effectively be worth in today's terms after inflation has eaten into it.

How to Use the Inflation Calculator

Enter the current amount — a price today, or a sum of money you're holding.
Enter the average annual inflation rate you expect over the period (historical inflation in most developed economies has generally averaged around 2–4% per year, though this varies significantly).
Enter the number of years to project forward.
Read the result — the future cost of today's amount, the total increase, and the real purchasing power of that amount after inflation.

Inflation Formula

Future Cost = Amount × (1 + Inflation Rate)^Years
Purchasing Power = Amount ÷ (1 + Inflation Rate)^Years

The first formula answers "what will this cost me later?" The second answers "how much is this worth, in today's terms, if I just hold onto it while prices rise?" — the two are inverses of each other.

Example Calculation

At a 3% average annual inflation rate, something that costs $1,000 today will cost approximately $1,344 in 10 years. Conversely, $1,000 held as cash today (earning no interest) will have the purchasing power of only about $744 in today's dollars after 10 years of 3% inflation.

Why This Matters for Saving and Investing

Cash sitting idle loses purchasing power every year that inflation runs above 0%. This is one of the core reasons people invest rather than simply save — a return that fails to beat the inflation rate results in a real loss of value, even if the account balance itself is growing. Compare this against the SIP Calculator or FD Calculator to see whether a given investment return outpaces inflation.

Frequently Asked Questions

Check your country's official statistics agency for historical inflation data (for example the Bureau of Labor Statistics in the US, the ONS in the UK, or Statistics Canada) and use a long-term average relevant to your planning horizon, since inflation varies year to year.

No, it simply applies whatever rate you enter consistently across the period. Actual inflation fluctuates year to year and can't be predicted with certainty, so treat the result as a projection based on your assumption, not a forecast.

"Future Cost" tells you what today's amount will likely cost to buy later. "Purchasing Power" tells you the reverse — what today's amount will effectively be worth, in today's money, if you hold it as cash rather than spend or invest it.

Results are estimates based on a constant assumed rate and are not a financial forecast or investment advice.