Inflation Calculator
Work out what an amount will be worth in a number of years because of inflation, what the same will cost then, and whether your interest keeps up.
Value at the end, in today's money
$7,811.98
What the same will cost then
$12,800.85
Loss of purchasing power
21.9 %
With interest, in today's money
$9,522.76
Real interest rate per year
-0.49 %
Purchasing power by year, in today's money
- Without interest
- With interest
Show the table
| Year | Without interest | With interest |
|---|---|---|
| 0 | $10,000 | $10,000 |
| 1 | $9,756 | $9,951 |
| 2 | $9,518 | $9,903 |
| 3 | $9,286 | $9,854 |
| 4 | $9,060 | $9,806 |
| 5 | $8,839 | $9,758 |
| 6 | $8,623 | $9,711 |
| 7 | $8,413 | $9,663 |
| 8 | $8,207 | $9,616 |
| 9 | $8,007 | $9,569 |
| 10 | $7,812 | $9,523 |
Please note: This is an example calculation, not financial advice. Personal circumstances, changes in rules and rates, and additional costs are not included. If in doubt, talk to a financial adviser.
Inflation differs from year to year and between products; the calculator uses one average rate.
How this number is calculated
The blocks use your input. Change a value above and they update with it.
Step 1 · Price rise over the period (as a factor)
Step 2 · Value at the end, in today's money
Step 3 · What the same will cost then
Step 4 · Growth from interest (as a factor)
Step 5 · With interest, in today's money
How the calculation works
See what inflation does to your money. Enter an amount, the inflation rate and the number of years, and see what the amount will be worth in today's money, what the same will cost then, and whether your interest keeps up.
Inflation means prices rise, so the same amount buys less. At 2.5% inflation, something costing 100 costs 102.50 a year later. It compounds: over several years the price rise grows like compound interest. The calculator divides your amount by that price rise to get its value in today's money, and multiplies by it to see what the same will cost later. If your money earns interest it grows too; if the interest is below inflation, your purchasing power still falls.
Formula
Price rise g = (1 + inflation ÷ 100)^years. Value in today's money = amount ÷ g. What the same will cost = amount × g. With interest = amount × (1 + interest ÷ 100)^years ÷ g. Real interest rate = (1 + interest ÷ 100) ÷ (1 + inflation ÷ 100) − 1.
Assumptions
- Inflation is the same average rate every year.
- All prices rise equally; in reality it differs between products.
- Tax on interest or savings is not included.
- Amounts are rounded to the cent, percentages to one or two decimals.
Example calculations
The button fills in the calculator above, so you can carry on from there.
-
Savings over 10 years
Value at the end, in today's money
$7,811.98
Amount $10,000.00 · Inflation per year (%) 2.5 · Number of years 10 · Interest or return per year (%) 2
-
Income in 25 years
Value at the end, in today's money
$18,285.93
Amount $30,000.00 · Inflation per year (%) 2 · Number of years 25 · Interest or return per year (%) 0
-
Interest above inflation
Value at the end, in today's money
$6,729.71
Amount $10,000.00 · Inflation per year (%) 2 · Number of years 20 · Interest or return per year (%) 4
Frequently asked questions
What will my savings be worth in 10 years?
At 2.5% inflation a year, 10,000 is worth 7,811.98 in today's money after 10 years. With 2% interest it is 9,522.76: still less than today, because the interest is below inflation.
What is the real interest rate?
The interest after inflation: what you actually gain in purchasing power. At 2% interest and 2.5% inflation the real rate is −0.49% a year. At 4% interest and 2% inflation it is +1.96%.
How high is inflation?
It varies from year to year. The European Central Bank, the US Federal Reserve and the Bank of England all aim for about 2% a year. In 2022 inflation was far above that in many countries.
What does inflation mean for a future income or pension?
At 2% inflation, 30,000 a year in 25 years is worth 18,285.93 in today's money. To buy as much then as now, you would need 49,218.18.
Can inflation be negative?
Yes, that is called deflation: prices fall and your money is worth more. At −1% a year, 10,000 is worth 10,515.36 in today's money after 5 years. Enter a negative rate to see it.
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