Inflation Calculator
See what today’s money will cost in future years — and how much buying power it quietly loses along the way.
$100.00 today buys what $134.39 will buy then — prices rise by a factor of 1.3439.
What $100.00 received in 10 years is really worth now.
$100.00 loses this much real value over the period.
Inflation raises prices by the formula future cost = amount × (1 + i)^t. At 3% inflation, something that costs $100 today will cost about $134 in 10 years. Read the other way, $100 received in 10 years has the buying power of just $74 in today’s money.
What inflation does to money
Inflation is the steady rise in the general price level. The same dollar buys a little less each year, so any fixed sum loses real value over time. There are two equivalent ways to see it: prices grow as amount × (1 + i)^t, while the buying power of a future sum shrinks as amount ÷ (1 + i)^t. The first tells you how much more you’ll need to pay later; the second tells you what a future amount is really worth in today’s money.
i is the annual inflation rate as a decimal and t the years; buying power today = amount ÷ (1 + i)^t
Worked example
Take $100 at a 3% average inflation rate over 10 years.
- 1 Write the rate as a decimal. i = 3% ÷ 100 = 0.03.
- 2 Compound it over the years. (1 + 0.03)^10 = 1.03^10 ≈ 1.34392 — the cumulative price multiplier.
- 3 Multiply by the amount for the future cost. $100 × 1.34392 ≈ $134.39 — what $100 of goods costs in 10 years.
- 4 Divide instead for buying power today. $100 ÷ 1.34392 ≈ $74.41 — what $100 received in 10 years is worth now.
- 5 Subtract for the buying power lost. $100 − $74.41 = $25.59 of real value erased over the decade.
Price multipliers and doubling time by rate
The multiplier is (1 + i)^t — how many times prices rise. The last column uses the rule of 70: years to double ≈ 70 ÷ rate.
| Annual rate | After 10 years | After 20 years | Years to double (rule of 70) |
|---|---|---|---|
| 2% | 1.22× | 1.49× | ≈ 35 years |
| 3% | 1.34× | 1.81× | ≈ 23 years |
| 5% | 1.63× | 2.65× | ≈ 14 years |
| 7% | 1.97× | 3.87× | ≈ 10 years |
Reading the results
The rule of 70. To estimate how long it takes prices to double, divide 70 by the inflation rate. At 3% that’s 70 ÷ 3 ≈ 23 years; at 7% it’s about 10 years. It’s a quick mental shortcut — the exact answer from the formula is close but not identical.
It compounds. Inflation isn’t added in a straight line; each year’s increase builds on a base that already grew. That’s why 3% for 20 years lifts prices by 81%, not 60% — the same compounding that grows savings also grows the cost of living.
Nominal vs. real. A nominal figure is the face value; a real figure is adjusted for inflation, expressed in today’s money. If your savings earn 5% while inflation runs at 3%, your real return is only about 2% — the gap is what actually grows your purchasing power.