Inflation Calculator
Calculate how inflation affects purchasing power over time
About This Calculator
The Inflation Calculator shows how inflation affects the purchasing power of money over time. It calculates how much money you'll need in the future to maintain current purchasing power.
How It Works
- 1
Enter the current amount of money.
- 2
Input the number of years into the future.
- 3
Specify the expected annual inflation rate (typically 2-3%).
- 4
The calculator shows future value needed and current purchasing power.
Formula Explanation
Future Value = Present Value × (1 + Inflation Rate)^YearsThe future value is calculated by compounding the present value at the inflation rate over the specified number of years.
Purchasing Power = Present Value / (1 + Inflation Rate)^YearsPurchasing power shows how much the current amount is worth in future dollars, accounting for inflation.
Tips
Historical inflation averages 2-3% annually, but can vary significantly.
Inflation erodes purchasing power - $100 today buys less in the future.
Investments should outpace inflation to maintain real value.
Consider inflation when planning long-term financial goals.