Inflation Calculator

See how the value of money changes over time with inflation. Enter an amount and two years to calculate adjusted value, cumulative inflation rate, and purchasing power with this free inflation calculator.

How to Use

  1. Enter current amount

    Input the amount of money in today's value.

  2. Set rate and period

    Enter the expected inflation rate (%) and time period (years).

  3. View results

    See the future purchasing power and the impact of inflation over time.

What is inflation?

Inflation is the sustained rise in prices that erodes purchasing power — the amount of goods and services a single unit of money can buy. As prices climb, the same $10,000 buys fewer things as time goes on.

This calculator shows two perspectives at once. First, how much you will need in the future to keep today's purchasing power (future amount required); and second, what your money is really worth at a future point in time (value in today's terms).

It is useful for retirement planning, setting long-term savings goals, and comparing nominal returns with real returns. If your deposit rate is lower than inflation, you can see that even though your money grows on paper, your real purchasing power actually shrinks.

The formula

Inflation compounds each year on top of the previous year's prices. Find the growth multiplier with (1 + r)^n, then multiply or divide the amount by it.

  • Future amount required = amount × (1 + r)^n
  • Value in today's terms = amount ÷ (1 + r)^n
  • Purchasing power loss = amount − value in today's terms

Example: with 1,000,000, an inflation rate of r=3% (0.03) and a period of n=10 years, the multiplier is 1.03^10 ≈ 1.3439. The future amount required is 1,000,000 × 1.3439 ≈ 1,343,900, and the value in today's terms is 1,000,000 ÷ 1.3439 ≈ 744,090, so purchasing power falls by about 255,910. Here r is the annual inflation rate and n is the number of years.

Frequently Asked Questions

What is inflation?
Inflation is the sustained rise in prices over time. At 3% annual inflation, goods you can buy for 1,000,000 this year will cost about 1,030,000 a year from now.
How does inflation affect purchasing power?
When inflation occurs, the same amount of money buys fewer things. After 10 years of 3% annual inflation, the real purchasing power of 1,000,000 drops to roughly 740,000.
What is the CPI (Consumer Price Index)?
The CPI, or Consumer Price Index, measures changes in the prices of the goods and services that consumers buy. It is the most widely used indicator for calculating the inflation rate.
How do 'future amount required' and 'value in today's terms' differ?
The future amount required is how much you would need at a future date to keep today's purchasing power (amount × multiplier), while the value in today's terms is what your money is really worth at that future point (amount ÷ multiplier). They are the same inflation viewed from opposite directions.
What is the average inflation rate?
In most developed economies, central banks target around 2% annual inflation, and actual rates have generally run between 2% and 3% over the past decade. Using 2–3% as a default for long-term estimates is reasonable.
Why is inflation calculated as compound interest?
Because each year's price increase is applied on top of the previous year's already-higher prices. So it is not simply 3% × 10 years = 30%, but (1.03)^10 ≈ 34.4% — the longer the period, the wider the gap versus simple interest.
How should I prepare for inflation?
The key is to earn a real return higher than the inflation rate. Stocks, real estate, and inflation-linked bonds (TIPS) are common inflation hedges. Keep in mind that if your deposit rate is below inflation, your real purchasing power shrinks.
What is the difference between nominal and real return?
Nominal return is the headline rate that ignores inflation, while real return is the rate adjusted for rising prices, measured in actual purchasing power. Roughly, real return ≈ nominal return − inflation rate, so a 5% return with 3% inflation gives a real return of about 2%.
Updated 2026 — latest rates

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