Inflation Calculator

When to use it

Inflation is the quiet change in what money can do. This page answers two versions of one question: what something costing X today costs after N years at a given rate, and what a sum received N years from now is really worth in today's money. Both matter for long contracts, pensions, rent reviews and salary offers compared across years.

Use it for planning rather than prediction: the rate is a what-if. Running 2% and 5% side by side gives a range you can defend, which is usually more useful than any single number.

How the maths works

Future price = amount × (1 + rate ÷ 100)^years. Each year's increase applies to the previous year's price, so the growth compounds: it is not amount × rate × years. Buying power runs the other way: value in today's money = amount ÷ (1 + rate ÷ 100)^years. At 3% over ten years the factor is 1.3439, so 100 becomes 134.39; in the other direction, 100 in ten years buys what 74.41 buys today. Future-price mode also lists each year's price, up to forty rows.

A worked example

A basket costing 100, with inflation at 3% a year for ten years.

1. Year 1: 100 × 1.03 = 103.00.
2. Year 5: 100 × 1.03^5 = 115.93.
3. Year 10: 100 × 1.03^10 = 134.39.
4. Buying-power mode: 100 ÷ 1.3439 = 74.41.

The two answers describe the same event from opposite sides: a rise of 34.39 and a loss of 25.59 in purchasing power.

Prices at a glance

Starting from 100, the columns grow faster than the rate suggests: at 3% the price more than doubles by year 30, and at 5% it more than quadruples.

Common mistakes

• Multiplying instead of compounding. 3% for ten years is not 30 on 100 but 34.39, and the gap widens with the horizon.
• Using the wrong direction. A future price multiplies; buying power divides. Swapping them turns a 34% rise into a 26% fall.
• Quoting a long-run average for a short horizon. Rent, tuition and energy each move at their own pace, so use the rate for the thing you are pricing.
• Ignoring nominal versus real. A savings rate below inflation still loses value, even while the balance grows.

Keep exploring

• CAGR Calculator — the growth rate that a start and an end value imply.
• Compound Interest Calculator — the same compounding maths applied to savings.
• Savings Goal Calculator — what you must set aside each month to hit a target.
• Guide: CAGR and Inflation Explained.