Inflation Calculator: Purchasing Power Over Time

Enter an amount and an expected annual inflation rate to see the future cost of the same goods and how much purchasing power your money loses.

Future cost of the same basket–
Future purchasing power of today’s money–
Loss of purchasing power–

A simple projection that assumes a constant annual inflation rate. Actual inflation varies from year to year; check your national statistics office for official figures.

How inflation affects your savings

Inflation is the general rise in prices over time. Cash sitting in a zero-interest account keeps its face value but buys less every year. At 3% inflation, something that costs 10,000 today costs about 13,440 in ten years.

Real return vs nominal return

To know whether an investment truly grew your wealth, subtract inflation from its return. Roughly: real return ≈ nominal return − inflation. The exact formula is (1 + nominal) / (1 + inflation) − 1.

For practical ways to protect your money, read how to protect your savings from inflation.

Frequently Asked Questions

What is purchasing power?

Purchasing power is the amount of goods and services a sum of money can buy. When prices rise, the same amount buys less, so purchasing power falls.

How is future cost calculated?

Assuming a constant rate, Future cost = Amount today × (1 + inflation)^years. Future purchasing power is the amount divided by the same factor.

Where can I find official inflation data?

Most countries publish a consumer price index (CPI) monthly — for example the Bureau of Labor Statistics in the US or the Office for National Statistics in the UK.

This content is for general information only and is not investment advice. Consider your own situation and consult a licensed professional before making financial decisions.