Inflation Impact Calculator
Enter an amount, an assumed annual inflation rate, and a number of years to see what that amount's purchasing power will shrink to — or how much you'd need in the future to match today's buying power.
How the Inflation Impact formula works
Purchasing power erosion, and its inverse:
Future purchasing power of today's amount = Amount / (1 + inflation)^years Amount needed in the future to match today's power = Amount × (1 + inflation)^years
Step-by-step calculation
- Convert the inflation rate to a decimal.
- Raise (1 + inflation rate) to the power of the number of years.
- Divide the amount by that factor to see its future purchasing power, or multiply by it to see what a future amount would need to be to match today's power.
Worked example
$50,000 today, at 3% average annual inflation over 20 years: Future purchasing power = 50,000 / 1.03^20 ≈ $27,684 — meaning $50,000 in 20 years would only buy about what $27,684 buys today.
Frequently asked questions
Is inflation the same every year?
No — this calculator uses a single assumed average rate for simplicity, but actual inflation varies year to year. A long-term average (historically often cited around 2-3% in many developed economies) is a common assumption, though it's not guaranteed.
How is this different from a compound interest calculator?
Compound interest calculates money growing at a rate; this calculator calculates purchasing power shrinking at a rate — they use the same underlying exponential math, applied in opposite directions.