Inflation Calculator
See what today's amount will cost in the future — or how much purchasing power it loses to inflation along the way.
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3% is a commonly used long-run planning average — check your country's actual current rate for real decisions.
Equivalent Future Cost
$1,344
+34.4% total
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Last updated: August 25, 2026 · Reviewed by the DoCalc team
Why Money Loses Value Over Time
Inflation is the gradual rise in prices across an economy, which means the same amount of money buys a little less each year. It's why a movie ticket, a loaf of bread, or a car cost noticeably less a decade ago than they do today — not because those things got better, but because the currency used to buy them lost purchasing power.
The Formula
This is the same compounding mechanism as compound interest — except instead of your money growing, prices are growing (or equivalently, your money's buying power is shrinking) by the same percentage every year, applied on top of the year before's already-higher price.
Worked Example
$1,000 today, at 3% annual inflation, over 10 years: $1,000 × (1.03)10 = $1,344. In other words, something that costs $1,000 today will cost about $1,344 in 10 years at that rate — or, put differently, today's $1,000 will only have the buying power of about $744 ten years from now.
Two Ways to Read This Number
| Framing | What it answers |
|---|---|
| Future cost | "What will this expense cost me in N years?" |
| Purchasing power | "What will my current savings actually be able to buy in N years?" |
Worth knowing: A commonly used long-run planning average is around 3% per year, but actual inflation varies a lot year to year — check your country's official statistics agency for current and historical rates rather than relying on a single fixed number for real decisions.
Common Mistakes to Avoid
The most common mistake is applying a single flat inflation rate across every category of spending — housing, healthcare, and education have historically inflated faster than the general rate in many economies, while some consumer electronics have gotten cheaper. A second mistake is forgetting that this calculator shows the effect of inflation alone, with no investment growth included — money sitting in cash loses purchasing power at roughly this rate, but money invested at a return above the inflation rate can still grow in real terms.
Frequently Asked Questions
How is future cost due to inflation calculated?
Future Cost = Amount Today × (1 + inflation rate)^years. A $100 expense at 3% annual inflation over 10 years costs about $134 in 10 years.
What inflation rate should I use?
3% is a commonly used long-run average for planning purposes, but actual annual inflation varies significantly year to year — check your country's official statistics agency for current and historical rates.
What does "purchasing power" mean here?
It's the flip side of future cost — how much a fixed amount of money today will actually be able to buy in the future, after inflation reduces what it can purchase.
Why does inflation compound over time?
Each year's price increase applies to the already-inflated price from the year before, not the original amount — the same mechanism as compound interest, just working against your money's value instead of growing your savings.
How is this different from a savings or investment calculator?
This calculator shows how prices rise (or how money loses value) with no investment involved. To see how invested money grows despite inflation, use a real (inflation-adjusted) return rate in an investment calculator instead.