How to use this calculator
- Amount. Enter a sum of money or the price of something today.
- Yearly inflation rate. Enter the average yearly rise in prices you want to test.
- Years. Enter how far ahead to look.
The calculator gives four results:
- Future cost of the same goods: what today's amount of goods would cost after the price rises.
- Purchasing power: what today's amount of money will buy later, measured in today's prices.
- Cumulative inflation %: the total rise in prices over the whole period.
- Value lost: the drop in purchasing power in dollars.
Worked example
These are the starting values in the calculator above and the results they give. Change any input to see your own numbers.
- Amount
- $1,000
- Yearly inflation rate
- 3%
- Years
- 20 years
- Future cost
- $1,806.11
- What $1,000 will buy
- $553.68
- Cumulative inflation
- 80.6%
- Buying power lost
- 44.6%
How inflation is calculated
Inflation is a general rise in prices over time. It compounds like interest: each year's increase is applied to prices that have already gone up.
To find the future cost, the calculator multiplies the amount by 1 plus the inflation rate, once for each year. To find purchasing power, it does the reverse and divides the amount by the same growth in prices.
Cumulative inflation is the total price growth over the period, minus 1, shown as a percent. Because of compounding, it is more than the yearly rate times the number of years. Value lost is the amount minus its purchasing power.
Future cost = A × (1 + f)^n, and Purchasing power = A ÷ (1 + f)^n- A
- amount today
- f
- yearly inflation rate as a decimal
- n
- number of years
- (1 + f)^n − 1
- cumulative inflation
- A − Purchasing power
- value lost
How to read the results
The two main results answer different questions.
- Future cost is for planning a purchase. If something costs a given amount today, this is roughly what you would need to buy it later.
- Purchasing power is for money that sits still. If cash earns nothing, this is what it will be worth in today's terms.
Money only keeps its value if it grows at least as fast as prices. The return left after subtracting inflation is called the real return. If savings earn less than the inflation rate, the balance goes up while its buying power goes down.
A few cautions:
- The rate here is fixed. Real inflation changes from year to year.
- Official inflation figures are averages across many goods and services. The prices you pay may rise faster or slower.
- Small rates still add up. Over a few decades, even modest inflation can cut purchasing power by a large share. The rule of 72 calculator gives a quick feel for how long it takes prices to double.
To plan long-term savings in today's money, see the retirement calculator.
Frequently asked questions
What is inflation?
Inflation is the general rise in the prices of goods and services over time. As prices go up, each dollar buys a little less than it did before. It is usually stated as a yearly percentage. A steady, low rate is common in many economies, but the rate can change a lot from one period to the next.
What is purchasing power?
Purchasing power is how much a sum of money can actually buy. When prices rise, the same number of dollars buys fewer goods, so purchasing power falls even though the dollar amount has not changed. The calculator shows this by converting a future sum into what it would be worth at today's prices.
How do I calculate the future cost of something?
Multiply today's price by 1 plus the yearly inflation rate, and repeat for each year. In formula terms, raise 1 plus the rate to the power of the number of years, then multiply by the price. Write the rate as a decimal, so 3% is 0.03. The calculator does this for you and shows the total rise.
What inflation rate should I use?
There is no single right figure, because future inflation is unknown. Many people test a low rate, a middle rate and a high rate to see a range of outcomes. You can also use a long-run average for your country as a starting point. For specific costs such as housing or education, prices may rise at a different pace.
How does inflation affect my savings?
Inflation reduces what your savings can buy. If your money earns a return lower than the inflation rate, its buying power shrinks even as the balance grows. What matters is the real return: the return minus inflation. Savings need a real return above zero to grow in terms of what they can purchase.
This calculator gives estimates for education only. It does not know your full situation and is not financial advice. Reviewed and updated November 15, 2026.