Inflation Calculator
Calculate the impact of inflation on future prices and purchasing power over time.
Use any currency — results use the same currency as your inputs.
Calculate how inflation impacts the future cost of goods and reduces future purchasing power.
Future Cost vs. Purchasing Power
- Future Equivalent Cost: The higher amount needed in the future to purchase something that costs X today.
- Future Purchasing Power: The reduced real buying power of keeping the same nominal amount X in the future.
Formula & Method
- Future Cost:
Amount × (1 + Inflation Rate ÷ 100)^Years - Future Purchasing Power:
Amount ÷ (1 + Inflation Rate ÷ 100)^Years
Worked Example
For an initial amount of 1,000 today at an average annual inflation rate of 4% over 10 years:
- Future Equivalent Cost:
1,000 × (1.04)^10 ≈ 1,480.24(what you must pay in 10 years for the same goods) - Future Purchasing Power:
1,000 ÷ (1.04)^10 ≈ 675.56(what cash holding 1,000 buys in 10 years) - Cumulative Price Rise:
48.02%
Frequently Asked Questions
How does annual inflation affect future costs and purchasing power?+
Inflation increases the price of goods over time. An item costing 1,000 today will cost more in the future (future equivalent cost), while holding the same 1,000 in cash buys fewer goods in the future (future purchasing power).
What formula does the Inflation Calculator use?+
Future Cost = Amount × (1 + Inflation Rate)^Years. Future Purchasing Power = Amount ÷ (1 + Inflation Rate)^Years.
Is this based on actual historical CPI data?+
This tool uses a rate-based arithmetic model allowing you to project any custom annual inflation rate.