How it works
Project the future cost of an amount and its purchasing power at a constant annual inflation rate.
Enter an amount, an annual inflation rate, and a number of years. The calculator compounds the rate forward to show the future cost and discounts it backward to show today's purchasing power.
Formula
Future cost = amount × (1 + r)^n; purchasing power = amount ÷ (1 + r)^n, where r = annual rate ÷ 100 and n = years.
A- Amount (currency)
r- Annual inflation rate (%)
n- Number of years (years)
Examples
- 1,000 at 3% for 20 yearsAmount 1,000 · rate 3% · 20 yearsFuture cost ≈ 1,806.11 · purchasing power ≈ 553.68
Frequently asked questions
Does this use historical CPI data?
No. This is a rate-based projection. Enter the average annual inflation rate you expect (or look up a past average rate) and the calculator compounds it.
What does purchasing power mean here?
It is how much today's amount would be worth in today's terms after inflation erodes it — the amount divided by the growth factor.
How to read the result
Future cost shows how much more the same basket might cost later. Purchasing power shows the erosion of a fixed sum's value.
Limitations
Applies a single constant rate; real inflation varies from year to year. The rate may also be entered negative to model deflation.
Source: Compound inflation formula (future value / present value of an amount).