How inflation affects money
Inflation means prices rise over time, so the same amount of money buys less. A constant annual rate compounds, much like interest in reverse.
Future cost = Amount × (1 + rate)years
Purchasing power = Amount ÷ (1 + rate)years
Frequently asked questions
What does the inflation calculator show?
Two things: how much the same goods will cost in the future, and how much your money today will be worth (its purchasing power) after inflation.
What inflation rate should I use?
Many economies target around 2–3% per year, but it varies by country and period. Use a rate that reflects your situation.
Is this based on official CPI data?
This version uses an average annual rate you choose, so it works for any country and any assumption. A CPI-based historical mode may be added later.