Inflation Calculator

See how inflation quietly erodes your money — what your cash will really buy in the future, and how much you'd need to keep up.

Your money

Current amount

Annual inflation rate

Time horizon

20 years

Future value in 20 years

$180,611

At 3% annual inflation over 20 years

Real purchasing power left–

Buying power lost–

What today's $100,000 will actually buy

Purchasing powerFuture nominal value

Show yearly breakdown

Year	Nominal value	Purchasing power	Lost

How this calculation works

The formula

With a constant annual inflation rate i over N years:

Future value = A · (1+i)^N · Purchasing power = A ÷ (1+i)^N

A = current amount · i = annual inflation rate · N = number of years. The future value is what you'd need so your money buys the same things; the purchasing power is what today's money will actually be worth.

Assumptions

A single constant annual inflation rate is applied for the whole period — real inflation varies every year.
Inflation compounds annually, so its effect accelerates over longer horizons.
The calculation is before investment returns: it isolates the effect of inflation alone on a static amount.
Price changes differ by category (housing, food, energy, education), so a single rate is an approximation.
Results are hypothetical and for education only — not financial advice.

Educational purposes only. Not financial advice. See the full methodology and disclaimer.

Inflation, explained

How do you calculate purchasing power?

The future value you'd need to keep the same buying power is amount × (1 + inflation)^years. The real purchasing power of today's money is amount ÷ (1 + inflation)^years — that's what the money will actually buy in the future.

What's a realistic inflation rate to use?

Long-run U.S. inflation has averaged around 2–3% per year. 2% is the central bank's target, 3% is a common planning assumption, and 5% is a higher-inflation scenario. Try the preset buttons above to see how much difference a point or two makes.

Why does purchasing power fall even though prices rise?

The same dollar buys less every year as prices go up. Because inflation compounds, the erosion accelerates over time — after 10 years at 3%, $100 only buys about $74.4 of today's goods; after 20 years, about $55.4.

Is this financial advice?

No. Results are hypothetical estimates based on a constant inflation rate. Real inflation varies from year to year and depends on what you buy. The calculator is for education only and does not constitute financial advice.