What is the difference between future cost and purchasing power?

Future cost is how much more you would need to buy the same thing later. Purchasing power is how much today's amount would be worth in future money.

How is inflation compounded?

The rate is applied each year on the growing amount, so the effect builds up over time like compound interest.

Which inflation rate should I use?

Use an average annual rate that reflects your economy or expectations. The calculator does not assume any fixed rate.

Finance Calculators

Inflation Calculator

See how inflation changes future cost and purchasing power over time.

Free browser toolRuns in your browserNo sign-up

Current amountCurrencyInflation rate (%)Number of years

Future equivalent cost

$13,439.16

Future cost

$7,440.94

Purchasing power

34.39%

Total inflation

Future purchasing power of today's amount

Purchasing power retained $7,440.94Purchasing power lost $2,559.06

Future cost is what today's amount would cost after inflation. Purchasing power is what today's amount would be worth in future money, showing how value erodes over time.

Inflation and purchasing power

Inflation compounds prices upward. Purchasing power uses the inverse calculation to show how much today's money could buy after the same period.

Future cost = Present x (1 + inflation)^years

Present: Current cost or amount
Inflation: Expected average annual rate

Worked example

$1,000 at 3% inflation for 10 years has a future equivalent cost of about $1,343.92.

Practical tips

Use a relevant rate
Your personal spending mix may rise faster or slower than headline inflation.
Compare real returns
Investment growth above inflation increases purchasing power; growth below it loses purchasing power.

About the Inflation Calculator

The Inflation Calculator shows how inflation changes the value of money over time using standard compound inflation.

Future cost is what today's amount would cost after inflation, while purchasing power is what today's amount would be worth in future money.

It also shows the total inflation over the period. Rising prices mean the future cost goes up while purchasing power goes down, and all maths runs in your browser.

Key features

Future equivalent cost
Future purchasing power
Total inflation over the period
Locale-aware currency formatting

How to use

1Enter the current amount and choose a currency.
2Enter the inflation rate.
3Enter the number of years.
4Read the future cost, purchasing power and total inflation.

Examples

Ten years of inflation

Input: USD 1,000 at 3% inflation for 10 years

Output: Future cost USD 1,343.92; purchasing power USD 744.09

The same 3% rate compounds prices upward and the value of today's money downward.

Frequently asked questions

What is the difference between future cost and purchasing power?: Future cost is how much more you would need to buy the same thing later. Purchasing power is how much today's amount would be worth in future money.
How is inflation compounded?: The rate is applied each year on the growing amount, so the effect builds up over time like compound interest.
Which inflation rate should I use?: Use an average annual rate that reflects your economy or expectations. The calculator does not assume any fixed rate.

Open a related tool to prepare your files or refine the finished result.