finance calculator
Estimate purchasing power changes over time.
Save this tool to quickly check the long-term erosion of savings or compare wage growth against cost of living changes.
Future cost
$1,344
Formula
Future cost = Current amount x (1 + inflation rate)^yearsInflation compounds the price level over time, reducing the buying power of today's money.
Step by step
Example
$1,000 today grows to about $1,344 in future cost after 10 years at 3% annual inflation.
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Summary
Future cost
$1,344
Basket of goods cost.
Purchasing power
$744
Real value of today's sum.
Price increase
$344
Cumulative inflation added.
Value erosion
$256
Purchasing power loss.
D3 visualization
Original purchasing power vs inflation-driven price increase.
D3 visualization
Watch how compounding inflation erodes the purchasing power of your money over the term.
Guide
Inflation represents the rate at which the general level of prices for goods and services is rising, which in turn reduces the purchasing power of your money.
This calculator helps you estimate the future cost of goods and services or see what a specific sum of cash will be worth in real terms after a number of years. It uses the standard compounding inflation formula to project future prices.
Enter the starting amount of money, the expected annual inflation rate (often estimated between 2% and 5% depending on historical averages), and the number of years. The results will show the future price of a basket of goods costing that amount today, along with the real purchasing power of your starting cash at the end of the term.
Purchasing power
The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.
CPI (Consumer Price Index)
A measure that examines the weighted average of prices of a basket of consumer goods and services.
Many financial planners use 2% to 3% as a long-term historical baseline for inflation in developed economies, but real inflation fluctuates year-to-year.
If your savings account interest rate is lower than the annual inflation rate, your cash is losing real purchasing power over time.