Inflation Calculator
Project how inflation changes the value of money over time: what a sum will cost in future years, and what future money is worth in today's terms.
What inflation does to money
Inflation is the general rise in prices over time, which means each unit of money buys a little less. At a constant annual rate, a basket costing an amount today will cost that amount × (1 + rate)^years in future — that is the “future cost”. The same maths in reverse shows what a future sum is worth in today's money.
Because the effect compounds, modest rates add up: at 3% a year, prices roughly double in about 24 years. That is why long-term savers care whether their return beats inflation — a return equal to inflation preserves buying power, and only a return above it grows real wealth.
This uses a single constant rate you choose. Real inflation varies year to year and differs by what you buy; official measures like a Consumer Price Index track it after the fact. Use the calculator to explore scenarios, and check a statistics agency's index for actual historical figures.
Sources: U.S. Bureau of Labor Statistics — CPI Inflation Calculator
Frequently asked questions
What inflation rate should I use?
Many economies target around 2% a year, but actual inflation has been higher and lower. For historical periods, look up the real figure from a national statistics agency; for the future, test a range rather than a single guess.
What's the difference between future cost and buying power?
Future cost is what today's basket will cost later (it goes up). Buying power is what a future amount is worth in today's money (it goes down). They are the same compounding, applied in opposite directions.
How fast does inflation halve my money's value?
Roughly the “rule of 70”: divide 70 by the rate. At 3.5% a year, buying power halves in about 20 years; at 7%, in about 10.
Does a savings account protect against inflation?
Only if its rate beats inflation after tax. If the account pays less than inflation, the balance grows in nominal terms but loses real buying power over time.
