Inflation Calculator

# Inflation Calculator

Estimate a future equivalent cost and the purchasing power of unchanged cash using an annual inflation assumption you choose. This calculator separates two questions: how much you might need to buy the same goods later, and what a fixed cash balance could buy in today's money.

What this calculator does

Enter a starting amount, a constant annual inflation percentage and a whole number of years from 0 to 100. The default 3% is an illustrative scenario, not today's inflation rate or a forecast. You can enter zero inflation or negative inflation above −100% to model deflation.

The result shows the future equivalent cost, the price increase or decrease, remaining purchasing power, and buying-power gain or loss. A year-by-year table starts at year 0 and includes both money series. All figures use one selected currency; region changes affect formatting, not exchange rates.

How it works

Let A be the starting amount, i the annual inflation rate divided by 100, and n the number of years. The cumulative price-growth factor is:

G = (1 + i)^n

The future equivalent cost is A × G. It is the amount needed later to match a cost today under this assumption. Unchanged cash purchasing power is A ÷ G, expressed in today's money. The nominal cash balance itself is still A.

The price-level percentage change is 100 × (G − 1). Purchasing-power loss is 100 × (1 − 1 ÷ G). These are different percentages: one compares the higher future price with the starting price, while the other measures what a fixed amount can buy. For negative inflation, the result uses price-decrease and purchasing-power-gain labels.

Example calculation

With a starting amount of 1,000, annual inflation of 3%, and 10 years, the growth factor is 1.03^10 ≈ 1.343916379.

The future equivalent cost is 1,000 × 1.343916379 ≈ 1,343.92. That is a 343.92 increase, or 34.39%. Meanwhile unchanged cash of 1,000 buys the equivalent of 1,000 ÷ 1.343916379 ≈ 744.09 in today's money: a 255.91 purchasing-power loss, or 25.59%.

At −2% for one year, the same starting cost becomes 980.00, while the unchanged cash has buying power of approximately 1,020.41, a 2.04% gain. At zero years or zero inflation, both money results equal the starting amount and changes are zero.

How to use the result

Use future equivalent cost to explore a spending goal, then try a range of assumptions rather than relying on one rate. Use the purchasing-power figure to understand unchanged cash; it is not a prediction that your bank balance falls to that number.

For a balance earning interest, use Compound Interest. For a saving target, try the Savings Goal Calculator. For a return scenario, use Investment Return. This tool includes none of those earnings or contributions. Results are educational estimates, not personalised financial advice.

Assumptions and limitations

• A single constant annual rate compounds over 0–100 whole years. Actual inflation varies over time, place and the goods you buy.
• There is no historical date lookup, CPI dataset, live rate feed or automatic forecast. For an observed UK historical comparison, use the Bank of England's calculator linked below.
• The nominal cash balance stays unchanged: no interest, investment returns, tax, deposits or withdrawals are included.
• Zero starting amounts are supported. Percentages still describe the price level and buying power per currency unit; they are not calculated by dividing a gain by the zero balance.
• Displayed money is rounded; calculations retain full precision. Extreme scenarios that exceed finite numerical range produce an error rather than a misleading number.
• Falling prices do not imply that everyone's income, savings or living standards improve; the result describes only this simplified price scenario.

Sources and method check

Method and worked arithmetic checked on 13 October 2026. The Bank of England explains inflation and price-level changes. Its historical inflation calculator uses price-index ratios; this tool instead derives a hypothetical ratio from your constant annual assumption. The distinction is intentional. These checks are source and arithmetic verification, not professional review or a forecast.

How we explain formulas, assumptions and sources