Skip to main content
Calcora

Saving and investing

Inflation Calculator

See how inflation changes purchasing power: what something could cost in the future, what a future amount is worth today, and how prices grow over time.

Your inflation assumptions

Enter an amount, the constant annual inflation rate to model, and how long to look ahead.

What do you want to work out?

What something that costs an amount today could cost later.

What it costs in today's prices.

Enter the constant annual inflation rate you want to model. The 3.00 shown is an example, not a forecast.

Time period unit

How far ahead to look, in years or months.

Private by design

Your amount, inflation rate, and time period stay in your browser and are not sent to Calcora.

How this inflation calculator works

  1. Choose a direction

    Future cost shows what something that costs an amount today could cost later. Today's value shows what an amount you will have later would be worth in today's prices.

  2. Enter an amount, a rate, and a period

    The annual inflation rate is an assumption you choose, not a forecast. The period can be in years or months.

  3. Prices compound at that rate

    Each year prices rise by the rate you entered, on top of the previous years' increases. Part of a year compounds at the same annual rate.

  4. See purchasing power, not just dollars

    The result compares the same purchase in today's and future prices, with cumulative inflation, the purchasing power lost, and nearby rates for comparison.

Understanding inflation

What inflation does to purchasing power

Inflation is a general rise in prices. A dollar stays a dollar, but when prices rise it buys less. Purchasing power is what an amount of money can buy, measured here in today's prices.

Future cost vs today's value

They are the same calculation in opposite directions. Future cost moves today's price forward: how many future dollars buy the same thing. Today's value moves a future amount back: what it would buy in today's prices.

Why inflation compounds

Each year's increase applies to prices that have already risen. At 3% a year, the second year's increase is 3% of a price that is already 3% higher, so increases grow over time, like interest on interest.

Annual inflation vs cumulative inflation

The annual rate is how much prices rise in one year; cumulative inflation is the total rise over the whole period. At 3% a year, calculated the same way as the calculator above:

The annual rate added up without compounding, cumulative inflation, and purchasing power lost for each period
Time periodRate × yearsCumulative inflationPurchasing power lost
1 year3.00%3.00%2.91%
5 years15.00%15.93%13.74%
10 years30.00%34.39%25.59%
20 years60.00%80.61%44.63%
30 years90.00%142.73%58.80%

The gap widens with time because each year's increase builds on the last. Purchasing power lost is a smaller percentage than cumulative inflation: it compares the same amount with higher future prices, while cumulative inflation compares future prices with today's.

Example inflation calculation

$10,000 and 3% a year for 10 years, in both directions. Calculated the same way as the calculator above.

Future cost

Cost today
$10,000.00
Price factor
1.03^10 = 1.3439
Estimated future cost
$13,439.16
Cumulative inflation
34.39%

Something that costs $10,000.00 today would cost $13,439.16 in 10 years if prices rose 3% every year.

Today's value

Future amount
$10,000.00
Value in today's dollars
$10,000.00 ÷ 1.3439 = $7,440.94
Purchasing power remaining
74.41%
Purchasing power lost
$2,559.06 (25.59%)

$10,000.00 received in 10 years would buy what $7,440.94 buys today at the same rate.

Inflation and long-term planning

Long-term projections are usually in future dollars. A savings or retirement balance decades from now is a larger number than the same balance today, but it will likely buy less. Converting it to today's value shows what it could buy in prices you know.

The Retirement Calculator and the Savings Calculator show results in future dollars. Use the Inflation Calculator to explore how a future dollar amount compares with today's purchasing power: choose Today's value, enter the projected amount, and use the same number of years.

Small differences in the rate matter over long periods, so compare a few rates rather than relying on one.

Assumptions

  • The annual inflation rate you enter stays the same for the whole period. It is an assumption, not a forecast; actual inflation changes from year to year.
  • The rate is an effective annual rate: prices after a period are today's prices × (1 + rate) raised to the number of years. A whole year at 3% is exactly 3%.
  • Part of a year compounds at the same annual rate: 6 months at 12% is 1.12^0.5 − 1 = 5.83%, not 6%, so that 12 months come to exactly 12%. Periods can be whole months.
  • Today's value divides by the same factor that future cost multiplies by, so the two directions are exact opposites.
  • Purchasing power remaining is 1 ÷ the factor; purchasing power lost is the rest. It is a different percentage from cumulative inflation, because one is measured against future prices and the other against today's.
  • Amounts are rounded to the nearest cent, with halves rounded up, once, at the end. Percentages are rounded to hundredths of a percent.
  • Rates from 0% to 100% are accepted. Deflation (falling prices) is not modeled.
  • No historical inflation data, price index, or forecast is used: only the rate you enter. Taxes, interest, and investment returns are not included.

How Calcora calculates

  • Every calculator explains the formula behind its result in plain language.
  • Calculators are designed to run in your browser, so your inputs are not sent to Calcora.
  • Results help you understand your options. They are not financial advice.
Read the methodology

Frequently asked questions

What inflation rate should I use?
Calcora does not suggest or forecast a rate. Enter a rate you want to model and try a few, such as a lower and a higher one, to see how much the result depends on it. The comparison table below a result does this for nearby rates.
Why isn't 3% for 10 years equal to 30%?
Because inflation compounds. Each year's 3% applies to prices that have already risen, so 10 years at 3% raises prices by about 34.39%, not 30%.
Why does purchasing power fall by less than the cumulative inflation?
They are measured from different starting points. If prices rise 34.39%, the future price is 1.3439 times today's. A dollar then buys 1 ÷ 1.3439, or 74.41%, of what it buys today: a 25.59% loss of purchasing power.
How are periods shorter than a year handled?
The annual rate is treated as an effective annual rate, so a part of a year compounds at the same rate. Six months at 12% raises prices by 5.83%, not 6%, and a full year by exactly 12%.
Can I enter a negative rate for deflation?
No. This calculator models inflation, so rates start at 0%. At 0%, prices stay the same and purchasing power is unchanged.
Does this use official inflation data?
No. It uses only the constant annual rate you enter. It does not look up past inflation, a price index, or a forecast.
Does Calcora store my information?
No. The calculation runs in your browser. Your amount, rate, and time period are not sent to Calcora or saved, and they are cleared when you leave or reload the page.

Related calculators

Planning in future dollars? The Retirement Calculator projects a retirement balance by age, and the calculators below show how savings and investments could grow.