About this calculator
An inflation calculator adjusts a past or future amount by a compound annual inflation rate to compare purchasing power.
Who should use it: Planners converting nominal dollars across years.
When to use it: Use it for rough real-value comparisons when you have an assumed inflation rate.
Compound inflation
r is the annual inflation rate as a decimal and n is the number of years. Purchasing-power and past-value modes divide by (1 + r)^n.
Step-by-step
Choose mode
Project future cost, find a past equivalent, or estimate future purchasing power.
Enter amount
Start with today's money (or the comparison amount).
Set inflation rate
Use a planning rate such as 2–3%, or a scenario-specific rate.
Enter years
How far forward or backward you want to measure.
Worked example: $100 over 10 years at 3%
Future-cost mode with $100, 3% annual inflation, 10 years.
- Multiplier = (1.03)^10 ≈ 1.3439
- Ending = $100 × 1.3439 ≈ $134.39
The future cost is about $134.39.
How to interpret the result
If prices rise at rate i, real purchasing power of a fixed nominal sum falls by roughly 1/(1+i)^t over t years.
Key definitions
- Inflation rate
- Annual percent increase in a general price level.
- Purchasing power
- How much real goods/services a fixed amount of money can buy.
- Price multiplier
- The (1 + r)^n factor applied over the chosen horizon.
Common use cases
- Retirement planning
- Comparing historical prices
- Salary and budget stress tests
Tips
- Pair this with compound interest to see whether investments outpace inflation.
- Try a range of rates — small rate differences compound a lot over decades.
Common mistakes
Using a one-year rate for multi-year totals without compounding
Fix: Use the compound formula over the full horizon.
Mixing nominal and real returns carelessly
Fix: Keep inflation and investment returns distinct, then compare.
Limitations
- A single average rate hides category-specific inflation.
- Official CPI series may differ from the rate you enter.