Financial Tool
Inflation Calculator
Calculate how inflation erodes your purchasing power over time.
Future Adjusted Cost
$1,343.92
What you will need in 10 years
Purchasing Power Value
$744.09
What today's $1000 is 'worth' in the future
Total Value Eroded$255.91
Over 10 years, at 3%, you lose 25.6% of your base purchasing power.
Σ The Formula
FV = PV × (1 + r)ⁿ
Real World Examples
Standard Inflation
$1,000 at 3% inflation for 10 years will require ~$1,344 to buy the same goods.
Savings Impact
$10,000 sitting in a drawer for 20 years at 4% inflation is only worth ~$4,563 in today's money.
# About This Calculator
Inflation is the silent tax on cash. It represents the rate at which the general level of prices for goods and services is rising, and consequently, the purchasing power of currency is falling.
Understanding the Results
- Future Adjusted Cost: If you want to buy a $1,000 laptop today, in 10 years at 3% inflation, that same laptop will theoretically cost ~$1,344. You need more dollars to buy the same thing.
- Purchasing Power Value: If you hide $1,000 under your mattress for 10 years, when you take it out, it will only have the purchasing power of ~$744 in today's terms.
How to Beat Inflation
To preserve wealth, your savings must grow at a rate higher than inflation. This is why investing in assets like stocks, real estate, or inflation-protected securities (TIPS) is crucial for long-term financial health.
How To Use
- Enter the **Starting Amount** of money.
- Enter the **Time Period** in years.
- Enter the projected **Annual Inflation Rate** (e.g., 2% or 3%).
- See how much that amount will be 'worth' in the future.
Frequently Asked Questions
What is a normal inflation rate?+
Central banks (like the Federal Reserve) typically target an inflation rate of around 2% annually. However, actual inflation varies year to year based on economic conditions.
Does inflation affect debts?+
Yes, and often in your favor! Inflation erodes the real value of debt. If you have a fixed-rate mortgage, you are paying it back with 'cheaper' dollars in the future, while the debt amount stays the same.
Who measures inflation?+
In the US, the Bureau of Labor Statistics (BLS) measures inflation using the Consumer Price Index (CPI), which tracks the cost of a basket of common goods and services.
Is deflation good?+
Not necessarily. While lower prices sound good, deflation often signals a weak economy where people delay purchases, leading to lower production, wage cuts, and unemployment.
Is Inflation Calculator free to use?+
Yes, Inflation Calculator on Matheric is completely free to use. We believe in accessible education and utility for everyone.
How accurate is Inflation Calculator?+
We use standard mathematical formulas and high-precision computing algorithms to ensure results for Inflation Calculator are accurate for academic and professional use.