Inflation Calculator
This inflation calculator shows two things at once: what something costing a given amount today will cost in the future, and what that same amount of money will actually be worth (in today's purchasing power) after inflation erodes it. Enter an amount, an annual inflation rate, and a number of years to see both sides of the same coin — useful for planning retirement income, education costs, or simply understanding why 'keeping cash under the mattress' quietly loses money every year.
A cost, price or amount of money in today's terms — a salary, an expense, or a sum you are planning to save or spend.
Long-run average inflation has been roughly 2–3% in the US and UK, and 5–6% in India. Use a higher figure to stress-test worst-case planning.
How far into the future you are projecting — for a retirement or education plan, this is often 10–30 years.
Future cost of the same thing
$19,898
What today's amount will cost you to buy later — e.g. $10,000 of spending today costs about $19,898 in 20 years at 3.5% inflation.
The real purchasing power of a fixed sum after inflation — e.g. a static $10,000 will only buy what $5,026 buys today, 20 years from now.
The starting figure you entered, shown for comparison against both projections above.
How to use this inflation calculator
- 1Amount today: any figure in today's money — a salary you want to maintain, a fee you expect to pay, or a savings goal.
- 2Annual inflation rate: use your country's long-run average as a baseline (roughly 2–3% for the US/UK, 5–6% for India) but also test a higher rate to see the worst-case impact on your plan.
- 3Number of years: the further out you project, the more dramatic the gap between today's number and both future figures becomes — inflation compounds exactly like interest, just working against you.
- 4Read both results together: 'future cost' tells you what to save toward; 'what today's amount will be worth' tells you how much a fixed sum will really buy by then.
Understanding your results
Future cost of the same thing answers 'how much will this cost me later?' — essential for retirement or education planning, where you must save toward tomorrow's prices, not today's. What today's amount will be worth then answers the opposite question: if you have this amount fixed today (in a low-interest account, or as a fixed pension), how much real purchasing power will it retain? The two numbers move in the same direction for the same reason — inflation compounding — but answer different planning questions, which is why both are shown side by side rather than just one.
The formula
Future cost = Amount × (1 + i)ⁿ · Real value = Amount ÷ (1 + i)ⁿAmount is today's figure, i the annual inflation rate as a decimal, and n the number of years. Future cost compounds the amount forward, exactly like compound interest, because prices rising by a steady percentage each year is mathematically identical to money growing by a steady percentage each year — inflation is compound interest working against your money's buying power. Real value runs the same formula in reverse, discounting a future or fixed amount back into today's terms — the same operation economists use to compare prices, wages or investment returns across different years on a like-for-like basis.
A worked example
$10,000 today, with inflation averaging 3.5% annually over 20 years: the future cost of whatever $10,000 buys today rises to about $19,898 — nearly double, purely from inflation. Looked at the other way, if you have a fixed $10,000 (say, under a mattress or in a 0%-interest account) it will only be able to buy what $5,026 buys today after those same 20 years — its real purchasing power has roughly halved. Over a shorter 10-year horizon at the same rate, the future cost is a more modest $14,106 — a reminder that inflation's damage is back-loaded, much like compound interest's gains, and grows faster the longer the time horizon.
Notes for the UK, US and India
The US and UK have targeted roughly 2% annual inflation for most of the past three decades (with notable spikes, such as 2021–2023), while India has historically run hotter, averaging 5–7%, making inflation-beating returns more urgent for Indian savers. In all three markets, cash sitting in a low-interest current account is close to guaranteed to lose real value every year; the practical takeaway is to compare any 'safe' return (a savings account, an FD, a fixed annuity) against the inflation rate, not against zero — a 4% return during 6% inflation is a real loss of purchasing power even though the account balance grew.
Frequently asked questions
How do I calculate the future cost of something due to inflation?+
Multiply today's cost by (1 + inflation rate)ⁿ, where n is the number of years. $10,000 today at 3.5% inflation for 20 years will cost about $19,898 in the future — use the calculator above for any amount, rate or period.
What inflation rate should I use for retirement planning?+
Most planners use 2.5–3.5% for the US/UK and 5–6% for India as a long-run baseline, then stress-test with a higher rate (e.g. +2 points) to check the plan still works if inflation runs hotter than expected.
How much does inflation reduce the value of my savings?+
At 3.5% inflation, money loses about half its real purchasing power in 20 years, and about a third in 10 years. Compare this against your savings account's actual interest rate — if the rate is lower than inflation, your balance is shrinking in real terms even as the number on the statement rises.
Why is inflation compared to compound interest?+
Both use the exact same exponential formula — a fixed percentage applied repeatedly, year after year. Compound interest grows your money; inflation shrinks what that money can buy. Treating inflation as 'negative compound interest' makes its long-run impact far more intuitive.
How does inflation affect my salary?+
If your salary rises slower than inflation, its real value falls even as the number grows — a 3% raise during 5% inflation is a 2% real pay cut. Compare your annual raise against the inflation rate for your country, not against 0%, to judge whether you are actually getting ahead.