📈 Inflation Calculator – What Will Your Money Be Worth?

The price tag changes. Your money doesn't.

A thousand dollars is still a thousand dollars in ten years. The tricky part is what that thousand dollars will actually buy.

Inflation is easy to overlook because it rarely announces itself in one dramatic price increase. It's the grocery shop that costs a little more, the takeaway that's gone up again, and the everyday expenses that slowly take a bigger bite out of your pay.

This calculator puts those small changes into perspective. Use it to see what future expenses might look like, how inflation can affect money sitting in savings, or how much extra income you may need to maintain the same spending power.

It's not about predicting exactly what things will cost. It's about understanding how even modest inflation can add up over time.

Inflation is weirder than you think

Four things that surprise people the first time they work them out:

• Your money can lose a quarter of its buying power without you spending a cent. Leave $1,000 untouched for ten years while prices rise by 3% annually, and it would have the purchasing power of about $744 in today's money. Your balance hasn't moved. What it can buy has.
• A coffee can quietly turn into a $10 habit. At 3% annual inflation, a $5 coffee would cost about $10.16 after 24 years — assuming its price followed inflation perfectly. Same caffeine. Double the price tag.
• Zero inflation doesn't mean everything is cheap. If prices rose sharply last year and inflation falls to zero this year, prices don't automatically return to where they were. They simply stop rising on average. A $10 item that became $12 could stay $12.
• A 10% price increase followed by a 10% decrease doesn't get you back to where you started. Start with a $100 purchase. Increase it by 10% and it becomes $110. Reduce that by 10%, and you land at $99. Percentages work from whatever number they're applied to, not the original price.

How does this inflation calculator work?

Both halves of the page rest on one idea: a rate applied again and again, each time to the number the last one produced. That is what compounding means, and it is why twenty years of 3% is a good deal more than 60%.

Working out a future price

future price = present price × (1 + rate)^years

• Present price is what the basket costs today — the amount you type in.
• Rate is the yearly inflation rate as a decimal, so 3% is 0.03.
• Years is how long the basket is left to rise.
• Future price is what the same basket is estimated to cost at the end of that time.

With the figures this page opens on:

$1,000 × (1.03)^10 = $1,343.92

At an assumed 3% a year, a basket costing $1,000 today could cost about $1,343.92 in ten years. The $343.92 is the extra money needed to buy exactly the same things.

Working out what money is worth

The same sum the other way up answers a different question: what a fixed amount will buy later.

future purchasing power = amount ÷ (1 + rate)^years

$1,000 ÷ (1.03)^10 = $744.09

An unchanged $1,000 would have the purchasing power of about $744.09 today. The balance is still $1,000 — nothing was taken out of the account — but it no longer covers what $1,000 covers now.

The two figures are not interchangeable, and quoting one where the other belongs is the easiest mistake a page like this can make. A basket that costs more is a price. A pile of money that buys less is purchasing power. They move in opposite directions from the same rate, which is why they are always shown together here.

Working out a change between two years

The historical mode uses published index numbers instead of a rate you choose. An index is the cost of a representative basket measured against a base year; this series uses 2010 = 100, so an index of 120 means prices sit 20% above their 2010 level.

amount in the ending year = starting amount × (CPI in ending year ÷ CPI in starting year)

Both numbers have to come from the same country's series. Each country builds its own basket, so dividing one country's index by another's produces a figure with no meaning — and comparing rupee amounts with dollar amounts as though the currencies were interchangeable would be worse. Swapping the two years reverses the comparison, which is why $1,000 in 1990 does not come to the same thing as $1,000 in 2020.

Published CPI is an average across a very large basket. Your own basket is not that average: if you rent, or spend more of your income on food than most households do, your experience can differ from the index in either direction.

What the calculator assumes

• The projection applies one constant compounded rate every year. Real inflation moves about: eight lean years followed by two hard ones do not come to the same total as the average applied evenly.
• Nothing else is included — no pay rises, savings interest, tax, fees or investment returns. A savings account earning less than inflation loses buying power, but the rate it earns is a separate calculation.
• The historical mode uses annual national index figures as published. They are revised from time to time, and the last year held differs by country.
• Deflation is allowed, because it happens. It raises the buying power of money, and it is not simply inflation with a minus sign: it usually arrives with its own set of problems.
• Changing the currency changes the symbol and the grouping, never the number. No exchange rate is used anywhere on this page.
• Every figure is an illustration. None of it is a forecast, and none of it is financial advice.

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