Inflation calculator

Prices compound too

For present cost C, constant annual inflation f and t years, future equivalent cost = C × (1 + f)^t. The present purchasing power of a future nominal amount A is A ÷ (1 + f)^t. These are different directions through the same price factor.

This is an assumed-rate scenario. It does not download an official consumer-price index or measure actual historical inflation between two dates.

Growth in a balance and growth in buying power are different. Read the inflation and real-return guide before combining this price scenario with the compound-growth calculator. Keep the nominal and today-money conventions consistent.

The future price of a 1,000.00 basket

At a chosen 3% annual inflation rate for ten years, 1,000 × 1.03¹⁰ = 1,343.916379…. The illustrative basket would cost 1,343.92.

A future 1,000.00 would therefore have the purchasing power of about 744.09 in today's money under the same scenario. Applying a flat 30% adjustment would miss compounding; ten annual increases of 3% do not equal one increase of 30%.

An index is not your exact household budget

Housing, transport, healthcare and other costs may change at different rates. A single assumption is useful for a scenario, but a personal basket can differ from an economy-wide measure. Investor.gov: investment and inflation risk identifies the loss of purchasing power as an investment risk.

When comparing investment growth, put the investment return and inflation on a consistent basis. A nominal balance can rise while its purchasing power falls.

Keep the direction and date clear

Label results as future cost or present purchasing power, and write down the base date outside the tool. Using an assumed constant rate for a historical period is not the same as using published monthly index data. Negative inflation is mathematically possible in a scenario, but no assumption can reduce the annual price factor to zero or below.