Inflation Calculator
See how rising prices change what your money can buy.
How inflation erodes money
Inflation is the general rise in prices. If prices rise 3% a year, something that costs 1,000 today costs about 1,344 in ten years. The other side of the same coin is purchasing power: 1,000 kept in cash will buy only what about 744 buys today.
The formulas
Future cost = amount × (1 + i)t and purchasing power = amount ÷ (1 + i)t, where i is the yearly inflation rate and t is the number of years.
Choosing a rate
Many central banks aim for inflation of around 2% a year, but actual rates differ between countries and years, and can be much higher. Use your country’s recent average, and try a few rates to see the range.
When you compare savings or investment returns, look at the return after inflation, because that is the real growth in what you can buy.
Frequently asked questions
What is a good inflation rate to use?
There is no single answer. Use the recent average in your country, then test a lower and a higher rate to see how sensitive the result is.
Does this use official price indexes?
No. It applies a constant yearly rate you choose. Real inflation changes from year to year.
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