Inflation Calculator

Inflation is the rate at which prices rise over time, and its mirror image is the rate at which money loses purchasing power. They are the same fact seen from two sides: if prices climb three per cent in a year, then a dollar buys three per cent less than it did, and something that cost a hundred dollars now costs a hundred and three. Over decades, that quiet drift reshapes budgets, savings and salaries. The arithmetic is compound, not linear. Three per cent a year is not thirty per cent over ten years; it is closer to thirty-four per cent, because each year's increase builds on the last. Over thirty years, three per cent inflation roughly doubles prices, so a sum that feels substantial today may cover far less than expected when it is finally spent. The longer the horizon, the more the effect compounds, which is why retirement planning leans so heavily on it. The consequence for cash is severe. Money in a non-interest-bearing account loses value every year it sits there. To simply stand still, savings must earn at least the inflation rate; to grow in real terms, they must beat it. This is why financial planners talk about real returns — the return after inflation — rather than the headline number, and why a five per cent return in a period of six per cent inflation is actually a loss. Inflation also changes what a fixed payment is worth. A pension, an annuity or a long-term bond that pays the same amount each year buys steadily less as time passes. Payments that are indexed to inflation preserve their value; those that are not quietly erode, and the erosion is easy to miss because the nominal figure never changes. Wages that fail to keep pace behave the same way. This calculator shows what an amount of money will cost, or be worth, in the future at a given average inflation rate, and how much purchasing power is lost along the way. It uses a single assumed rate, while real inflation varies year to year and differs by spending category, so treat the result as an illustration of the direction and scale of the effect rather than a precise forecast.

This calculator returns estimates for general information only. It is not financial, investment, tax or legal advice, and it cannot replace guidance from a qualified professional who knows your circumstances. Figures such as loan payments, investment growth and retirement projections are simplified models based on the inputs and assumptions you provide, not guarantees of future results.