Inflation Calculator
Understand how inflation impacts your money over time. Enter an amount, inflation rate, and time period to see the future cost of goods and the real value of your money.
Understanding Inflation
Inflation is the rate at which the general level of prices for goods and services rises over time, reducing purchasing power. It means each dollar buys fewer goods and services than it did before.
Future Cost Formula
Future Value = Present Value x (1 + inflation rate)^years. This formula shows how much more something will cost in the future due to inflation. Conversely, today's purchasing power = amount / (1 + rate)^years.
Real vs. Nominal Returns
Nominal returns are the raw percentage gain on an investment. Real returns subtract inflation to show actual purchasing power growth. An 8% nominal return with 3% inflation gives approximately a 5% real return.