Inflation and buying power
A short guide to what inflation does to money over time — the formula, what a normal rate looks like, and how to read the calculator.
Open the Inflation Calculator →What this tool does
The Inflation Calculator takes an amount, an annual inflation rate, and a number of years, then shows two things: the future buying power of that amount in today's money, and the future price of buying the same goods. It also shows how much of the original value is lost. It all runs in your browser.
The formula
Inflation compounds like interest, only working against you. After n years at
rate r, an amount's buying power is
amount ÷ (1 + r)n, while the cost to buy the same basket is
amount × (1 + r)n. The share of value lost is
1 − 1 / (1 + r)n.
How to use it
- Open the Inflation Calculator.
- Enter an amount in today's money.
- Set an annual inflation rate — 2–3% is a common long-run assumption.
- Choose how many years ahead to look.
- Read the buying power, the cost to match, and the value lost; scan the chart and table.
Why it matters
Money left idle slowly loses purchasing power. That's the core argument for putting savings somewhere that at least keeps pace with inflation. To see the other side — how a return can outrun inflation — pair this with the Compound Interest Calculator.
Your numbers stay private
All calculations happen locally in your browser — nothing you enter is uploaded.
FAQ
How does inflation reduce buying power?
Rising prices mean each dollar buys less; divide by (1 + r)n to see the eroded value.
What is a typical inflation rate?
Many central banks target around 2% a year, with long-run averages often near 2–3%.
Is my data uploaded?
No — it all runs in your browser.
This tool gives estimates for general use and is not financial advice.
Ready to try it? Open the Inflation Calculator →