Inflation Calculator (purchasing power over time)
See what an amount of money grows to with inflation, or what today's money will be worth in future purchasing power.
Inflation and purchasing power
Inflation is the rate at which prices rise, which is the same as the rate at which money loses buying power. Because it compounds year on year, its effect over a decade or two is much larger than the annual figure suggests.
future cost = amount × (1 + r)ⁿ
today's value of future money = amount / (1 + r)ⁿ
Two ways to look at it
The first mode answers "what will this basket cost later?" — prices going up. The second answers "what is that future sum really worth?" — money going down. They're the same maths inverted, and which one you want depends on whether you're budgeting a future cost or valuing a future payment.
The rule of 70
A quick mental shortcut: divide 70 by the inflation rate to get the years for prices to double. At 3%, that's about 23 years; at 7%, only 10. The calculator also shows the mirror figure — how long until money keeps only half its purchasing power.
Worked example
Something costing 100 today, with 3% average inflation, costs about 134.39 in ten years — a 34% rise, not 30%, because each year's increase builds on the last. Turned around, 100 received ten years from now is worth about 74.41 in today's money. That gap is why a savings return below inflation is actually a loss in real terms.
A note on the rate
This uses one constant average rate. Real inflation varies year to year and differs by category — housing, energy, and food often move quite differently from the headline index — so treat long projections as rough.