Inflation Calculator

Find out what today's money will cost in the future, and how much purchasing power your money loses over time due to inflation.

Direct Answer: Future Cost = Present Amount × (1 + Inflation Rate)ⁿ. This tells you how much more you'll need to pay in the future for something that costs a certain amount today.
Please enter a valid amount.
Please enter a valid inflation rate.
Please enter a valid number of years.
Future Cost of This Amount–
Purchasing Power in Today's Terms–
Total Value Lost to Inflation–

How Is Inflation Impact Calculated? (Formula)

Future Cost = Present Amount × (1 + r)n
Purchasing Power (Today's Terms) = Present Amount ÷ (1 + r)n
Where: r = Annual inflation rate (decimal), n = Number of years

Step-by-Step Calculation

1. Convert the inflation rate to decimal: r = Rate ÷ 100.
2. Raise (1 + r) to the power of the number of years (n) to get the inflation multiplier.
3. Multiply the current amount by this multiplier to get the future cost.
4. Divide the current amount by the multiplier to see what it will be worth in today's purchasing power terms.

Example Calculation

InputValue
Current Amount৳1,00,000
Inflation Rate6% per year
Years10
Future Cost≈ ৳1,79,085
Purchasing Power in Today's Terms≈ ৳55,839

Definitions

Inflation: The rate at which the general price level of goods and services rises over time, reducing the purchasing power of money.

Purchasing Power: The value of money expressed in terms of the quantity of goods or services it can buy; inflation reduces purchasing power over time.

Frequently Asked Questions

What does an inflation calculator show?

An inflation calculator shows how much a current amount of money will cost in the future, or equivalently, how much its purchasing power will shrink over a given period due to inflation.

What is the inflation formula?

The future cost due to inflation is calculated as Present Amount x (1 + inflation rate)^number of years.

Why does inflation reduce purchasing power?

Inflation reduces purchasing power because as prices rise over time, the same amount of money buys fewer goods and services than it did before.

How can I protect my savings from inflation?

Investing in assets that historically grow faster than inflation, such as equities, real estate, or inflation-linked instruments, can help offset the erosion of purchasing power over time, though all investments carry risk.

This calculator assumes a constant average inflation rate over the period entered; actual inflation varies year to year and this is not financial advice.