Inflation Calculator
Inflation means the same money buys a little less each year. Enter an amount and a rate to see two things: what a purchase will cost you later, and how little today’s money will actually buy down the road.
Your numbers
Result
- Purchasing power lost
- $446.32
| Item | Amount |
|---|---|
| Amount today | $1,000.00 |
| Cost of the same thing in the future | $1,806.11 |
| What the amount will buy in the future | $553.68 |
How inflation compounds
Inflation compounds like interest, only against you. Over n years at rate r, prices multiply by (1 + r)^n:
future cost = amount × (1 + r)^n
At 3% a year, something costing $1,000 today costs about $1,806 in 20 years. Flip it around and today’s $1,000 will buy only about $554 worth of goods in 20 years — that is the falling line on the chart.
Nominal versus real
The dollar figure on a price tag is nominal; adjusted for inflation, it becomes the real value — what it actually buys. A raise that matches inflation keeps you flat in real terms; a savings account paying less than inflation loses real money even as the balance number rises. Always compare returns and raises against the inflation rate for the same period.
Why it matters for long-term plans
Over a working life or a retirement, small annual inflation adds up to a large gap. A pension or a cash pile that ignores inflation quietly shrinks in what it can buy. This is the case for investing above the inflation rate and for revisiting long-term numbers every few years rather than trusting a figure set decades ago.
Informational and educational result. Not a substitute for professional advice.
Frequently asked questions
Sources
- U.S. Bureau of Labor Statistics — Consumer Price Index (CPI)
- Standard compound-inflation (future value) formula
Related calculators
Compound Interest
See how compound interest grows your money over time, with an optional monthly contribution. Compare what you put in against what the interest adds.
CalculateFinanceRetirement
Estimate the nest egg you will have at retirement from your current savings, monthly contribution and expected return — and the monthly income it could provide using the 4% rule.
CalculateFinanceCD
Calculate what a certificate of deposit (CD) is worth at maturity from the deposit, APY and term. See the interest earned and how the balance grows month by month.
Calculate