Inflation calculator
Type the inflation rate you want to assume; the calculator holds no price-index data, so the answer is only as good as your rate. It shows what something that costs a given amount today will cost in the future, and how much of today's buying power the same cash keeps. Switch to the second mode to find the average yearly rate between two prices.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Choose Future cost to project a price forward, or Inflation rate to work out the average rate between two prices.
- For the future cost, enter the amount, the yearly inflation rate you want to assume and the number of years.
- For the rate, enter the earlier price, the later price and the years between them.
- Read the results. Years can be fractional, for example 2.5.
How it works
With a constant yearly rate r, prices after t years are multiplied by (1 + r)^t. That factor gives both numbers:
- Cost in the future = amount × (1 + r)^t
- Buying power = amount ÷ (1 + r)^t, the value of the same money in today’s prices
- Rate between two prices = (later ÷ earlier)^(1 ÷ t) − 1
Real inflation changes every year, so a single rate is a simplification. The calculator uses the rate you give it and nothing else.
Worked example
A holiday costs 2,500 today. At an assumed 3% a year, in 5 years it costs 2,500 × 1.03^5 = 2,898.19. Put the other way, 2,500 saved in cash would only buy what 2,156.52 buys today, so 343.48 of buying power is lost.
Tips
- Test a few rates. Try the rate you expect and one or two points either side; small differences add up over decades.
- Compare with your interest rate. Money in an account that earns less than inflation loses buying power even though the balance grows.
- Use it for salaries and prices. A pay rise smaller than inflation is a cut in real terms; the rate mode shows how fast a price has actually risen.
- It is an estimate. The results are not a forecast or financial advice.
Frequently asked questions
How do you calculate the future cost of something with inflation?
Multiply today's price by (1 + rate) once for every year. At 3% for 10 years the factor is 1.03^10 = 1.3439, so an item that costs 100 today costs about 134.39.
What does purchasing power mean here?
It is what the same cash will buy, measured in today's prices. At 3% for 10 years, 100 kept as cash buys what 74.41 buys today, because 100 ÷ 1.3439 = 74.41.
Where do I get the inflation rate to enter?
This tool deliberately has no built-in data. Use your own assumption or a figure from your national statistics office. A long-term average is a sounder guess than last year's number, and the result is an estimate either way.
Can I use a negative rate for deflation?
Yes, rates down to −50% are accepted. A negative rate makes the future cost lower than today's and the buying power higher.
How does the inflation rate mode work?
It takes two prices of the same thing and the years between them and returns the constant yearly rate that would turn one into the other: (later ÷ earlier)^(1 ÷ years) − 1. A price that goes from 100 to 121 in two years is 10% a year.