TheFreeTool

Inflation Calculator

Prices tend to rise over time. Enter an amount, an average inflation rate and the number of years to see the future cost and what today's money will be worth.

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Good to know

This is an estimate for general information. It is not tax, legal or financial advice. Your payslip can differ because of tax codes, credits, local taxes, benefits and your employer's rules. Check official guidance or ask a qualified adviser.

What it does

  • Future cost of something that costs a set amount today
  • What your money will be worth in today's terms
  • Shows how much buying power is lost
  • Works in any currency from the currency menu

How to use it

  1. Enter the amount.
  2. Enter the yearly inflation rate you expect.
  3. Enter the number of years and read the result.

How does inflation change the value of money?

When prices rise, the same amount of money buys less. At 3% inflation, something that costs $1,000 today costs about $1,344 in ten years.

Turn it around and $1,000 in ten years will only buy what about $744 buys today. That is why savings that earn less than inflation lose buying power. The calculator uses one steady rate, but real inflation changes from year to year.

Example

At 3% a year over 10 years, an item that costs $1,000 now would cost about $1,344. Put another way, $1,000 would then be worth about $744 in today's money, a loss of about 25.6% in buying power.

Questions people ask

What inflation rate should I use?
Look up the recent average in your country. Many central banks aim for about 2% a year.
Is this a forecast?
No. It shows what a steady rate would do. Real inflation moves around.
Why does buying power fall by less than the inflation total?
Because the loss is measured against a bigger price. 34% higher prices means money buys about 25.6% less.

Disclaimer

This tool is for general information only. It is not financial, tax, investment or legal advice, and results are estimates that may differ from your bank, lender or tax authority. Rates, limits and tax rules change. Bank and brand names are used only to describe what the tool does; they belong to their owners and we are not affiliated with them. Check the figures with a qualified professional or your provider before you decide. You use this tool at your own risk, and TheFreeTool is not liable for any loss that follows. Read the full disclaimer

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