Inflation is the general rise in prices over time, which means each unit of currency buys less. If inflation is 6% per year, something costing 100 today will cost about 179 in 10 years — and 100 saved under your mattress will only buy what about 56 buys today.
Why calculate it?
Savings: see if your bank interest beats inflation.
Retirement: plan with real (inflation-adjusted) numbers — try our retirement planner.
Salary: a 5% raise during 8% inflation is a pay cut in real terms.
FAQs
How does an inflation calculator work?
It compounds an annual inflation rate over your chosen number of years to show what a sum of money will be worth in today's purchasing power, or what a price will become in the future.
What inflation rate should I use?
Use your country's recent average CPI inflation. Many countries target about 2–3%, but rates vary — some emerging markets have seen much higher rates.
Why does inflation matter for savings?
If your savings earn less interest than inflation, your money loses real value every year. Investing is how people try to beat inflation over the long term.
Is this inflation calculator free?
Yes. It is 100% free with no signup required.
What is the difference between inflation and CPI?
CPI (Consumer Price Index) is the measured price of a fixed basket of goods — inflation is the percentage rate at which that index rises. This calculator compounds the inflation rate; official statistics publish the CPI it is derived from.
Can inflation be negative?
Yes — that is called deflation, when the general price level falls. It is rare and usually signals weak demand. Some calculators accept a negative rate to model it, which makes future money worth more than today's.
How reliable is a 30-year inflation projection?
Only as a scenario. Because inflation compounds, a 1-point error in the rate snowballs over 30 years into a huge difference. Use projections to compare choices (invest vs hold cash), not as exact forecasts.
How inflation math works
Inflation compounds exactly like interest. If prices rise r per year for n years, a basket costing PV today will cost FV = PV × (1 + r)n in the future. Flip it around and today's money loses purchasing power: PV = FV ÷ (1 + r)n. That is the whole engine of this calculator — one compounding formula, applied forward (what will things cost?) or backward (what is future money worth today?). The r you enter is the annual CPI inflation rate; n is the number of years.
Worked example: $1,000 at 3% for 10 years
Future price level: 1.0310 = 1.34392. So $1,000 of spending power today needs $1,343.92 in ten years to buy the same basket (1000 × 1.34392). Reversed: $1,000 received ten years from now is worth only $744.09 in today's money (1000 ÷ 1.34392). That $255.91 gap is the silent tax inflation levies on idle cash — and why savings earning 1% while inflation runs at 3% shrink in real terms every year.
Practical tips and limits
Use a long-run average (many countries average 2–3%) for decades-long plans, not last year's spike. Remember the CPI basket is an average — your personal inflation depends on what you actually buy (rent-heavy budgets feel housing inflation most). And compounding punishes small rate errors over long horizons: at 2% vs 4% over 30 years, $10,000 becomes $18,114 vs $32,434 — so treat far-future figures as scenarios, not promises.
Nominal vs real: the return that matters
A savings account paying 5% during 3% inflation does not make you 5% richer — your real return is roughly 5 − 3 = 2%. That subtraction is the most important inflation habit: always compare returns after inflation. The Rule of 72 gives a quick feel for compounding damage: divide 72 by the inflation rate to get the years until prices double. At 3%, 72 ÷ 3 = 24 years — within one mortgage, your money's purchasing power halves. At 6%, it halves in just 12 years. This is why "safe" cash hoarded for decades is one of the riskiest long-term strategies in real terms.