Financial calculator
Inflation and purchasing power
See how inflation erodes purchasing power: estimate future prices or the real value of a sum of money after several years at a given inflation rate.
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About this calculator
Inflation means the same basket of goods tends to cost more over time. A nominal balance that does not grow can buy less in the future; wages and returns need to be compared in real terms.
This calculator applies a constant annual inflation rate to project either a future nominal amount or the loss of purchasing power of money held today. It is a teaching and planning tool, not a forecast of official CPI.
For investing, compare nominal returns with inflation to estimate real return. For salaries, check whether raises keep up with the rate you assume here.
How to use it
- 1Enter today’s amount (price, salary, or cash balance).
- 2Set an annual inflation rate and the number of years.
- 3Calculate to see the projected future nominal value or real purchasing power.
- 4Try a higher/lower rate to see sensitivity.
Frequently asked questions
- Is the inflation rate the same as CPI?
- CPI is one official measure. You can enter any rate you want to model—historical average, a stressed scenario, or a personal estimate for your city or category of spending.
- What is purchasing power?
- It is what a unit of money can buy. If inflation is 5% and your cash earns 0%, after one year that cash typically buys about 5% less of the same basket.
- How does this relate to real return?
- Roughly, real return ≈ nominal return − inflation (more precise formulas exist). If your investment returns 8% and inflation is 3%, real growth is near 5% before taxes and fees.
Results are mathematical estimates. Verify the real conditions of any financial product before making decisions.