Inflation Calculator
An inflation calculator answers one question: if prices rise at a steady rate, what is today's money worth later? Ours does that arithmetic at a rate you choose. It never predicts what inflation will be.
What an inflation calculator does
Inflation is how fast prices rise across the whole economy. When prices rise, each dollar buys a little less. An inflation calculator compounds a yearly rate to show two sides of the same idea: what today's purchases would cost in the future, and what today's dollars would buy once prices have risen.
The math is compound growth. At a yearly rate r for n years, prices grow by a factor of (1 + r) to the power n. Multiply today's cost by that factor to get the future cost. Divide today's dollars by it to get their future buying power.
How to use ours
The calculator is the second tab of the Inflation Illustrator. Enter three numbers: a starting amount, a yearly inflation rate, and a number of years. It opens on an example of $1,000 at 3% a year for 20 years; change any of them to test your own. It holds the rate constant every year, which keeps the math simple enough to check by hand. Nothing you enter is stored.
A worked example
Start with $1,000 and a rate of 3% a year for 20 years.
- Prices grow by a factor of 1.03 to the power 20, which is about 1.806.
- What costs $1,000 today would cost $1,806 after 20 years.
- $1,000 held as cash would then buy what $554 buys today, about 45% less.
- At 3% a year, prices double in about 23.4 years. The rule of 72 gives a quick estimate: 72 รท 3 = 24 years.
| After | What $1,000 of today's purchases costs | What $1,000 in cash buys, in today's prices |
|---|---|---|
| 5 years | $1,159 | $863 |
| 10 years | $1,344 | $744 |
| 15 years | $1,558 | $642 |
| 20 years | $1,806 | $554 |
The calculator shows these same figures for this example, computed by the same code.
What it leaves out
- Real inflation changes. It moves from year to year, sometimes a lot. A constant rate is a way to think it through, not a forecast.
- Your own prices differ. Rent, health care, tuition, and groceries rise at different speeds, and the mix you buy is your own.
- Money that grows is a different calculation. This shows what inflation does to money that sits still. Savings that earn interest, or pay that rises, change the picture.
Related
- The Inflation Illustrator: change one thing that could happen next, from oil and tariffs to the Fed, and see roughly how much it would push inflation up or down over six months and a year.
- What makes inflation go up or down? An explainer on multi-cycle.com.
- Multi-Cycle Planning: all of the free tools.