Inflation Calculator – Compare Money Value Over Time
See how inflation changes the value of money over time.
About the Inflation Calculator
What is the Inflation Calculator?
An inflation calculator shows how the cost of goods rises over time and how inflation erodes the purchasing power of money.
Why use this calculator?
Inflation is why a dollar saved under a mattress buys less later. Planning for it is essential for retirement, salaries and long-term savings goals.
How to use it
- Enter the amount of money.
- Enter an average annual inflation rate.
- Enter the number of years.
- See the future cost and the reduced purchasing power.
Formula
Future cost = amount × (1 + inflation)^years; real value = amount ÷ (1 + inflation)^years.
Historical inflation has averaged around 2% to 3% in many developed economies, but it varies and can spike.
Frequently Asked Questions
How does inflation affect my savings?
If your savings earn less than inflation, your real wealth shrinks even as the balance grows. Investors aim to beat inflation for that reason.
What is real versus nominal return?
Nominal return is the headline figure; real return subtracts inflation and reflects the change in purchasing power.
What is compound interest?
Compound interest is interest earned on both your original money and on previously earned interest. Over time it can make savings grow much faster than simple interest.
What is the difference between nominal and effective return?
The nominal return ignores compounding within the year, while the effective (annualised) return accounts for it. The effective figure is usually higher and better reflects real growth.
How does inflation affect my returns?
Inflation erodes purchasing power. The real return is the nominal return minus inflation, so an investment can grow in dollars yet still lose value in what it can buy.
What rate of return should I assume?
A common long-term assumption for a diversified stock portfolio is about 6% to 8% per year after inflation, but returns vary and are never guaranteed.
Does this account for taxes and fees?
Unless stated, the tool shows pre-tax, pre-fee growth. Subtract your fund expense ratio and expected tax rate to estimate what you keep.
Is this calculator free to use?
Yes. Every calculator on this site is completely free, with no hidden fees, no subscriptions and no limits on how many times you can use it.
How accurate are the results?
We use standard, widely accepted formulas and calculate in your browser using double-precision arithmetic. Results are rounded for readability, so treat them as reliable estimates rather than a guarantee. Real-world factors can vary the true figure.
Can I add this calculator to my own website?
Yes. Open this calculator page and use the "Add to your website" box in the sidebar to copy a ready-made iframe snippet, then paste it into any HTML page.