About the Inflation Calculator
Inflation is the quiet tax on cash. At 3% a year, money loses roughly a quarter of its purchasing power over a decade. This calculator shows both sides: what today’s amount will actually buy in future, and how large a future amount must be to feel the same as today.
How to use the Inflation Calculator
- Enter the amount of money in today’s terms.
- Enter your assumed average annual inflation rate.
- Enter the number of years to project forward.
- Compare the eroded purchasing power against the equivalent future amount you would need.
The formula behind it
Future purchasing power = amount ÷ (1 + rate/100)^years. Equivalent future amount = amount × (1 + rate/100)^years.
Frequently asked questions
What inflation rate should I assume?
Most developed-market central banks target around 2%. Using 2.5–3% for long-range planning builds in a small margin without being alarmist.
Why does my savings account still lose value?
If the account pays 2% and inflation runs at 3%, the real return is negative 1%. The balance grows in nominal terms while buying less each year.
How long until money halves in value?
Divide 70 by the inflation rate. At 3% purchasing power halves in about 23 years; at 7% it halves in ten.
Does official inflation match my personal inflation?
Often not. Headline indices track a national basket. If your spending skews toward rent, childcare, or energy, your personal rate can run well above the published figure.