— Investment
Inflation Calculator
See what inflation does to money over time — how much a sum will still buy in the future, and how much more the same things will cost.
Future buying power in 20 years
$553.68
- Value lost to inflation
- $446.32
- Same goods would cost
- $1,806.11
- Total inflation
- 80.61%
— Year by year
| Year | Buying power | Lost | Same goods cost | Cumulative inflation |
|---|---|---|---|---|
| 1 | $970.87 | $29.13 | $1,030 | 3% |
| 2 | $942.6 | $57.4 | $1,060.9 | 6.09% |
| 3 | $915.14 | $84.86 | $1,092.73 | 9.27% |
| 4 | $888.49 | $111.51 | $1,125.51 | 12.55% |
| 5 | $862.61 | $137.39 | $1,159.27 | 15.93% |
| 6 | $837.48 | $162.52 | $1,194.05 | 19.41% |
| 7 | $813.09 | $186.91 | $1,229.87 | 22.99% |
| 8 | $789.41 | $210.59 | $1,266.77 | 26.68% |
| 9 | $766.42 | $233.58 | $1,304.77 | 30.48% |
| 10 | $744.09 | $255.91 | $1,343.92 | 34.39% |
| 11 | $722.42 | $277.58 | $1,384.23 | 38.42% |
| 12 | $701.38 | $298.62 | $1,425.76 | 42.58% |
| 13 | $680.95 | $319.05 | $1,468.53 | 46.85% |
| 14 | $661.12 | $338.88 | $1,512.59 | 51.26% |
| 15 | $641.86 | $358.14 | $1,557.97 | 55.8% |
| 16 | $623.17 | $376.83 | $1,604.71 | 60.47% |
| 17 | $605.02 | $394.98 | $1,652.85 | 65.28% |
| 18 | $587.39 | $412.61 | $1,702.43 | 70.24% |
| 19 | $570.29 | $429.71 | $1,753.51 | 75.35% |
| 20 | $553.68 | $446.32 | $1,806.11 | 80.61% |
— Buying power over time
Download— How it works
Buying power = Amount ÷ (1 + i)^t · Future cost = Amount × (1 + i)^t
What inflation does to money
Inflation is the steady rise in the general price level. As prices climb, each unit of currency buys a little less, so a fixed sum of money loses value simply by sitting still. The amount on the note never changes — what changes is what it can buy.
There are two ways to look at the same effect. Buying power asks “what will today’s money be worth in the future?” and divides by the cumulative price rise. Future cost asks “what will today’s goods cost later?” and multiplies by it. This calculator shows whichever you choose, and the other figure alongside.
Worked example — $1,000 at 3% inflation for 20 years: Prices rise by 1.03^20 ≈ 1.806, so cumulative inflation is about 81%. Buying power: 1,000 ÷ 1.806 ≈ $554 — that is what today’s $1,000 will still buy. Future cost: 1,000 × 1.806 ≈ $1,806 — what a $1,000 basket today will cost then. Value lost to inflation: about $446.
Reading the chart
The chart is deliberately not a growth curve. The flat line across the top is the money’s face value — it never changes. Below it, the green band is what the money can still buy and the claret band is what inflation has taken; together they always add up to the original amount.
Watching the green shrink and the claret grow makes the cost of holding idle cash obvious: nothing has been spent, yet purchasing power drains away year after year.
Why it matters for saving and investing
Inflation is the reason cash “feels” safe but quietly loses ground. To preserve buying power, money generally needs to earn at least the inflation rate; to grow in real terms it has to beat it. The gap between your return and inflation — the real return — is what actually makes you better off.
That is why long-term savings are usually invested rather than held as cash. To project growth that already nets out rising prices, the compound interest calculator’s advanced options let you enter an inflation rate and show the inflation-adjusted, “real” balance directly.
Assumptions
- A single, constant annual inflation rate is applied across the whole period — real inflation varies year to year.
- The amount itself is assumed to sit idle (e.g. as cash); it earns no return that might offset inflation.
- Figures are illustrative and not tied to any official price index.
— Reader questions
What inflation rate should I use?
Many developed economies target around 2–3% a year, so 3% is a reasonable long-run default. Individual years and countries vary widely, so try a range — and remember your personal inflation (rent, food, fuel) can differ from the headline figure.
What is the difference between buying power and future cost?
They are two sides of the same coin. Buying power divides today’s amount by the cumulative price rise to show what it will still buy; future cost multiplies it to show what the same goods will cost later. Switch between them with the toggle at the top.
Does this use real historical inflation data?
No — it applies the single constant rate you enter, which keeps it usable for any currency and any period. For official year-to-year figures you would need a published consumer price index.
How do I protect my money from inflation?
Generally by earning a return at least equal to inflation. Cash rarely manages that, which is why long-term savings are usually invested. What matters is the real return — your return minus inflation.
Why is the chart not going up like the other calculators?
Because inflation shrinks value rather than growing it. The flat top line is the unchanging face value; the green band below is the buying power that remains, and it falls every year as the claret “lost” band rises.