Inflation
What will things cost in the future?
Prices tend to go up every year, so the same dollar buys a little less over time. See what something will cost later, what your cash will really be worth, and what your investments earn after inflation.
How to use this calculatorShowHide
- Step 1: Enter a price or amount of money you care about today.
- Step 2: Enter an inflation rate (about 3% a year is a common long-term average) and a number of years.
- Step 3: See the future price — and how much buying power cash loses if it just sits there.
What you'll need
- A price or amount of money
- How many years ahead you want to look
Don't know a number? Leave the example value in, or tap the ⓘ next to it. New to this? Read the Beginner's Guide →
Future cost in 10 years
$134.39
At 3% inflation, something that costs $100.00 today will cost about $134.39 in 10 years. Put the other way, $100.00 kept in cash then will only buy what $74.41 buys today — it loses 25.6% of its value.
- Purchasing power of today's amount
- $74.41
- Real return (Fisher)
- 3.8835%
- 7.00% nominal − inflation, compounded
- Simple subtraction (approx.)
- 4.0000%
- overstates by 0.1165 pts
| Year | Future cost | Purchasing power |
|---|---|---|
| 0 | $100.00 | $100.00 |
| 1 | $103.00 | $97.09 |
| 2 | $106.09 | $94.26 |
| 3 | $109.27 | $91.51 |
| 4 | $112.55 | $88.85 |
| 5 | $115.93 | $86.26 |
| 6 | $119.41 | $83.75 |
| 7 | $122.99 | $81.31 |
| 8 | $126.68 | $78.94 |
| 9 | $130.48 | $76.64 |
| 10 | $134.39 | $74.41 |
What this means
In plain English
Inflation means prices go up over time. A coffee that costs $3 today might cost $4 in ten years. So the same dollar buys a little less each year.
This matters for two reasons:
- Cash sitting under the mattress (or in a 0% account) slowly loses buying power.
- An investment only makes you richer if it grows faster than prices rise.
When to use it
- Seeing what something will cost in the future
- Understanding why keeping lots of cash long-term costs you
- Finding your real return — how much richer your investments actually make you
Example
Something that costs $100 today, with prices rising 3% a year, will cost about $134.39 in 10 years.
If your investments grow 7% a year and prices rise 3%, your real growth is about 3.88% a year — not quite the 4% you'd get by subtracting.
Watch out for
Thinking a savings account always "keeps you even." If your account pays 1% and prices rise 3%, you're losing about 2% of buying power every year — even though the number in your account goes up.
The math (optional)
- Future cost = today's price × (1 + inflation)^years
- Buying power = amount ÷ (1 + inflation)^years
- Real return = (1 + investment return) ÷ (1 + inflation) − 1 — called the Fisher equation. Simply subtracting the two rates is a rough shortcut that always overstates it a little.