Inflation Calculator (Future Value of Money)

How it works

Future cost = amount × (1 + inflation)^years · Future buying power of today's cash = amount ÷ (1 + inflation)^years

Inflation works in two directions from the same rate. Looking forward, the price of a fixed basket of goods grows by (1 + rate) each year, so a cost compounds upward. Looking at cash you hold, that same compounding erodes what each dollar can buy — money sitting idle loses purchasing power even though its face value never changes. Over decades even a modest rate is powerful: 3% roughly halves buying power in about 24 years.

Worked example

At 3% inflation over 20 years the factor is 1.03^20 ≈ 1.806. A $10,000 purchase today will cost about $18,061, while $10,000 of cash will buy only about $5,537 worth of today's goods — a loss of roughly $4,463 in purchasing power.

Frequently asked questions