Inflation Calculator – Future Cost and Buying Power of Money

Inflation is the slow rise in the prices of everyday goods and services. It means a dollar buys a little less each year, so money kept under the mattress shrinks in real terms, and a salary or pension that stays flat is really a pay cut. This calculator shows the effect over any number of years, in both directions: what prices will become, and what your money will be worth.

How to use the inflation calculator

Enter an amount. It can be a price, a salary, a savings balance or a budget.
Enter an inflation rate per year. Use your country’s recent average or a planning figure such as 2.5%.
Enter the number of years.

The results show the future cost of the same things, the future buying power of your amount in today’s money, the total rise in prices, the share of buying power lost and how many years it takes for prices to double at that rate.

The inflation formulas

Inflation compounds like interest, so the calculator uses a growth factor:

Factor          = (1 + rate)^years
Future cost     = Amount × Factor
Buying power    = Amount ÷ Factor
Total price rise = Factor − 1
Buying power lost = 1 − 1 ÷ Factor
Doubling time   = ln 2 ÷ ln(1 + rate)

The rule of 72 gives a quick estimate of the doubling time: divide 72 by the rate. At 3%, 72 ÷ 3 = 24 years, close to the exact 23.4.

Worked example

You have $1,000 and expect inflation to average 3% a year for the next 10 years.

Factor = 1.03^10 ≈ 1.343916
Future cost = 1,000 × 1.343916 ≈ $1,343.92. Groceries that cost $1,000 today would cost about $1,344.
Buying power = 1,000 ÷ 1.343916 ≈ $744.09. Your $1,000 kept as cash would buy what $744 buys today.
Total price rise = 34.39%
Buying power lost = 1 − 1 ÷ 1.343916 ≈ 25.59%
Prices double in about 23.4 years

Notice that the two percentages differ. Prices rising 34.39% means the same money buys 25.59% less, because the loss is measured against the higher prices.

Inflation at different rates

What $100 becomes over 10 years:

Yearly inflation	Future cost of $100 of goods	Buying power of $100	Prices double in
2%	$121.90	$82.03	35.0 years
3%	$134.39	$74.41	23.4 years
5%	$162.89	$61.39	14.2 years
8%	$215.89	$46.32	9.0 years

Small differences in the rate add up. Over 10 years, 5% inflation erodes buying power about one and a half times as much as 3% does.

Real returns and pay rises

Inflation is the benchmark for any return. To find your real return, divide rather than subtract:

Real return = (1 + nominal return) ÷ (1 + inflation) − 1

A 5% investment return with 3% inflation is a real return of 1.05 ÷ 1.03 − 1 ≈ 1.94%. A savings account paying 4% in the same year grows your buying power by only about 0.97%. And a 3% pay rise during 3% inflation leaves you exactly where you were.

Tips

Plan big purchases in future dollars. A $30,000 car today costs about $40,300 in 10 years at 3%.
Inflation-proof long-term goals. When planning for retirement, use the future cost, or work in today’s dollars throughout, as our retirement calculator does.
Your own inflation may differ. Official figures track an average basket. If most of your spending is rent, childcare or fuel, your personal rate can be well above or below the headline number.

Common mistakes

Adding instead of compounding. 10 years at 3% is a 34.39% rise, not 30%. The gap grows with time and with the rate.
Confusing the two percentages. A 34% rise in prices is a 26% loss in buying power, not a 34% loss.
Using one bad year as the average. A single year of 8% inflation doesn’t mean the next 20 will match it. For long horizons, use a long-run average.
Forgetting that inflation affects debt too. It erodes what you owe in real terms as well. A fixed loan payment gets easier to afford as prices and wages rise.

Frequently asked questions

What inflation rate should I use?

For long-range planning, many people use 2–3% a year. The US Federal Reserve, the European Central Bank and the Bank of England all target 2% inflation over the medium term, though actual inflation can run well above that for a time, as it did in 2021–2023.

Why isn't 10 years at 3% the same as 30%?

Because inflation compounds. Each year's rise is applied to prices that have already risen. At 3% a year, prices rise 34.39% over 10 years, not 30%.

What is the difference between future cost and buying power?

Future cost is what today's basket of goods will cost later, the amount times (1 + rate)^years. Buying power runs the other way. It is what your fixed sum will be worth in today's money, the amount divided by the same factor.

Can I find what an old price is worth today?

Yes, if you know the average inflation rate in between. Enter the old price, the average yearly rate and the number of years, and read the future cost. For exact historical figures, official price indexes such as the US Consumer Price Index give month-by-month data.

What happens with deflation?

Enter a negative rate. At −1% a year for 5 years, $1,000 of goods would cost $950.99, and $1,000 in cash would buy what $1,051.54 buys today.

Last updated October 29, 2026 · By the ZTool team