Inflation calculator
FinanceNo. 37 / 84
See what inflation does to an amount over the years, forwards or backwards, and how much purchasing power quietly disappears.
inflation is a tax on patience, collected in small coins.
work surface
Math, not advice — results are indicative.Read the disclaimer.
most-used utilities
Salary reality check
What a raise is really worth after a few years of rising prices.
Retirement pot
What today's savings might buy when you finally stop working.
Old price tag
Turn a price from years ago into today's money, then sit down.
pro tips
The rule of 72 still works: divide 72 by the inflation rate to get the years until prices double. At 3% that is roughly 24 years.
Use your own basket. If rent, childcare and coffee are your big lines, the headline rate is a rumor with a press release.
Compare a raise to inflation over the same period. A 4% raise during 5% inflation is a pay cut with better stationery.
what it does
One amount, one rate, one number of years. In the forward direction the amount is money you hold today, and the widget shows what it becomes after years of rising prices. Switch the chips and the amount is future money, converted back into what it buys right now. The past value sits alongside in both cases, so the whole journey stays visible.
Use it when a retirement projection quotes a number forty years out, when a raise meets a rising cost of living, when a long contract promises the same fee for a decade, or when a savings account offers 2% while prices move faster. It also settles the annual argument about whether things got more expensive or you simply got worse at shopping.
Put in $1,000 at 3% a year for ten years and the future value is $1,343.92. Run it the other way and $1,000 in ten years' time is worth $744.09 today, a purchasing-power loss of 25.6%. The first figure is what the money needs to become; the second is what it will feel like.
The widget compounds annually at a constant rate, which is tidy and slightly fictional. Real inflation moves around, differs by basket and is measured with an index nobody enjoys reading. Treat the output as direction and scale, not as a prediction for the price of one specific loaf.
quick answers
How do I calculate inflation over several years?
Multiply the amount by 1 plus the annual rate, once for each year. The widget does the compounding for you, which is the only reason anyone reaches for a calculator instead of a napkin.
What does purchasing power mean here?
How much stuff the money buys, not how many notes are in the envelope. A 25.6% loss means the same amount buys roughly three quarters of what it did before.
Can I enter a negative inflation rate?
Yes. Deflation makes money worth more over time and flips the sign of the purchasing-power figure. It is rare, but the math does not argue.