Inflation Calculator
Calculate how inflation can affect the value and purchasing power of money over time.
Inflation Results
What Is Inflation?
Inflation is the general increase in the prices of goods and services over time. As prices increase, the purchasing power of money generally decreases.
For example, if inflation averages 5% per year, something that costs 10,000 today would require more money in the future to purchase the same item.
Inflation Formula
The inflation rate is entered as a percentage and converted to a decimal before the calculation.
Purchasing Power Formula
How to Use This Calculator
- Enter the current amount of money.
- Enter the expected annual inflation rate.
- Enter the number of years.
- Click Calculate Inflation.
- Review the estimated future cost and purchasing power.
Example
Suppose an item costs 10,000 today and inflation averages 5% annually for 10 years. The calculator estimates how much money would be needed in 10 years to have the same purchasing power for that item.
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Frequently Asked Questions
What does an inflation calculator do?
It estimates how much money may be needed in the future to purchase something that costs a certain amount today, based on an assumed inflation rate.
Can I use a different inflation rate?
Yes. Enter any assumed annual inflation rate to create different estimates.
Does this calculator predict actual inflation?
No. It is an estimate based on the inflation rate you enter. Actual inflation can vary over time.
What does purchasing power mean?
Purchasing power refers to the amount of goods or services that a given amount of money can buy. Higher inflation can reduce purchasing power over time.