Inflation Calculator

Inflation is the slow loss in what a unit of money buys. A sum that looks comfortable today may not cover the same shopping basket in ten years, and an investment that earns less than inflation shrinks in real terms even while its balance grows. The calculator turns an amount, a yearly inflation rate and a number of years into plain figures: what the same goods will cost, what your money will be worth, and what your return is after allowing for the rise in prices.

Two views of one effect

If prices rise by a factor f over the period, there are two ways to say it. Looking forward, something that costs 1,00,000 today will cost 1,00,000 × f. Looking at your cash, 1,00,000 held untouched will buy only 1,00,000 ÷ f worth of today’s goods. The page shows both, together with the percentage of purchasing power lost and the number of years money takes to lose half its value at that rate.

A worked example

The defaults are 1,00,000, inflation of 6% a year, 10 years and a return of 8%. Goods that cost 1,00,000 today will cost 1,79,084.77, a price rise of 79.08%. The 1,00,000 itself would be worth 55,839.48 in today’s money, a loss of 44.16%, and it halves in value in about 11.9 years. Invested at 8%, it grows to 2,15,892.50, which is worth 1,20,553.24 in today’s money, so the real return is 1.887% a year. A second example, 50,000 for 25 years at 5%, shows prices more than tripling, to 1,69,317.75, and the money keeping only 14,765.14 of its value.

Real returns

The real return is what remains after inflation: (1 + nominal) ÷ (1 + inflation) − 1. It is smaller than the simple difference between the two rates because both compound. If you leave the return field empty, the page skips the real-return lines and shows only the effect on prices and purchasing power. A real return that is negative means your savings are losing buying power even though the bank balance is rising.

Choosing an inflation rate

Use a long-run average for your country as a starting point, then adjust for what you buy. Education, healthcare and rent have often risen faster than the general index, while some electronics have fallen. Retirement planning is the usual use for long horizons: a person who needs 50,000 a month today needs far more in 25 years, which is why the retirement calculator asks for inflation too. Try two or three rates to see how sensitive your plan is.

Edge cases

A negative inflation rate (deflation) is accepted and shows prices falling. Fractions of a year work, and the table rounds up to whole years. Very long periods produce huge numbers that are mathematically right but not realistic, since no one can forecast prices 50 years ahead.

Limits

The page applies one steady rate for the whole period, while real inflation changes from year to year and differs between goods and places. It does not know your personal basket, taxes on interest or changes in exchange rates. Treat it as a way to see the scale of the effect, not to predict a price.

Related tools

• Retirement and FIRE Calculator applies inflation to future spending when it sizes a retirement corpus.
• Rule of 72 Calculator estimates how soon prices double at a given rate.
• Compound Interest Calculator shows the nominal growth you compare against inflation.
• Emergency Fund Calculator reminds you that a safety cushion needs topping up as costs rise.