Inflation Calculator

How inflation erodes money over time

Inflation is the gradual rise in prices, which means the same amount of money buys less each year. This calculator shows both sides of that coin: how much more a basket of goods will cost in the future, and how much less today's money will be worth (its future buying power).

The formula

• Future cost = amount × (1 + rate)^years. At 3% inflation, $1,000 of goods costs about $1,806 in 20 years.
• Future buying power = amount ÷ (1 + rate)^years. That same $1,000, kept under the mattress, buys only about $554 worth in 20 years.

Why it matters

This is the quiet argument for investing rather than holding cash. To merely preserve your purchasing power, your savings need to grow at least as fast as inflation; to build real wealth, they need to beat it. Historic average inflation is roughly 2–4% a year, but it varies — use a rate that fits your situation.

FAQ

What inflation rate should I use?

For long-term planning, many people use a long-run average of about 3%. For a specific past period, use the published rate for your country and year. The calculator accepts any rate, so it's worth modelling a few scenarios rather than betting on a single number.

What's the difference between future cost and future buying power?

Future cost is how much more a basket of goods will cost later — it grows the amount by compounding the inflation rate forward. Future buying power is the flip side: how little today's money will be worth then, found by dividing by the same factor. One asks "what will it cost," the other asks "what will my cash buy."

Does the calculator account for compounding?

Yes. It compounds the inflation rate annually over the number of years you enter, rather than just multiplying the rate by the years. That's why the effect grows faster the longer the time horizon.

Does my data stay private?

Yes. The amount, rate, and years you enter are processed entirely in your browser and are never sent to a server or stored.

Is the inflation calculator free?

Yes, it's free with no sign-up and works on mobile and desktop. The projections are estimates for planning, not financial advice.