What's the difference between future cost and purchasing power?

They're the same compounding effect seen from two ends. Future cost asks 'how many more dollars will I need later to buy the same thing?' — it multiplies by (1+rate)^years. Purchasing power asks 'how much will my fixed dollars buy later, measured in today's prices?' — it divides by (1+rate)^years. If prices rise 34% over a decade, your money loses about 26% of its buying power over the same decade.

Why is assuming a constant rate a simplification?

Real inflation moves year to year — some years 1%, some years 8%. This tool applies one fixed rate to every year because that keeps it transparent and lets you test scenarios. The trade-off is that it's an estimate, not a prediction. For planning over long horizons, run a few rates (low, central, high) and treat the spread as your uncertainty band.

Where do I find real inflation data?

Use official statistical agencies rather than this tool's assumption. In the US the Bureau of Labor Statistics publishes the Consumer Price Index (CPI) at bls.gov. For international and comparative figures, the OECD publishes harmonised inflation data at oecd.org. This calculator never invents CPI numbers — you supply the rate.

What is the rule of 72 for inflation?

Divide 72 by the annual inflation rate to estimate how many years it takes for prices to roughly double (or, equivalently, for money to lose about half its purchasing power). At 3% inflation, prices double in about 72 ÷ 3 = 24 years. At 6%, about 12 years. It's a quick mental check; the calculator gives the exact figure.

Is this calculator in today's dollars or future dollars?

Both, depending on the output. Future cost is expressed in future (nominal) dollars — the actual sticker price you'd expect to pay later. Purchasing power is expressed in today's (real) dollars — what your money would buy at today's prices. Don't mix them in the same comparison.

What rate should I enter?

There's no single right answer — that's why the rate is yours to choose. Many central banks target around 2% annual inflation as 'price stability,' so 2-3% is a common baseline assumption for long-run planning in developed economies. If you're modelling a high-inflation environment or a specific category that rises faster (like tuition or healthcare), enter a higher rate. Check an official source for the recent actual rate before deciding.

Inflation Calculator

Pick a constant annual rate and a time horizon — see both how much more things will cost and how much less your money will buy.

Buğra SözeriFinance

Updated June 27, 2026 · Published June 27, 2026

Reviewed by Convertitive Finance Desk

Financial disclaimer: This calculator is for educational purposes only and is not financial advice. It assumes a single, constant inflation rate that you supply — it does not look up real CPI data, so the result is an estimate, not a forecast. Verify all figures with a qualified financial professional before acting on them.

Inflation works in two directions at once. As a rate compounds year after year, the price of things goes up and the buying power of a fixed sum goes down — they are two views of the same effect. The calculator below takes an amount, an annual inflation rate you choose, and a number of years, then reports both: the projected future cost of something priced at that amount today, and the purchasing powerof that money in today's dollars after the years elapse. Because it extrapolates a single fixed rate, it deliberately avoids quoting historical index figures; for the real numbers, use an official source like the rate-publishing agencies linked below. For the compounding mechanics behind the formula, see our compound interest calculator.

Amount today ($)

Annual inflation rate (%)

Years

Future cost (prices rise)

$1,343.92

What costs $1,000.00 today is expected to cost this much in 10 years.

Purchasing power (money erodes)

$744.09

In today's dollars, $1,000.00 will buy only this much after 10 years.

Estimate only. Assumes a constant annual rate of 3% for the entire period — real inflation varies year to year, so treat this as a rule-of-thumb projection, not a forecast.

How to use

Enter an amount
A price or sum of money in today's dollars — e.g. 1000 for a $1,000 expense or savings balance.
Choose an annual inflation rate
Enter the rate you want to assume as a percent (e.g. 3 for 3%). Central banks often target around 2%; pick whatever rate reflects your scenario. The same rate is applied to every year.
Set the time horizon
How many years to project forward. Read off the future cost (prices rising) and the purchasing power (money eroding) side by side.

$1,000 at a constant rate

Amount today	Rate	Years	Future cost	Purchasing power
$1,000	2%	10	$1,218.99	$820.35
$1,000	3%	10	$1,343.92	$744.09
$1,000	5%	20	$2,653.30	$376.89
$1,000	7%	30	$7,612.26	$131.37

Future cost = amount × (1 + rate)^years. Purchasing power = amount ÷ (1 + rate)^years. Both assume the rate never changes.

Frequently asked questions

What's the difference between future cost and purchasing power?: They're the same compounding effect seen from two ends. Future cost asks 'how many more dollars will I need later to buy the same thing?' — it multiplies by (1+rate)^years. Purchasing power asks 'how much will my fixed dollars buy later, measured in today's prices?' — it divides by (1+rate)^years. If prices rise 34% over a decade, your money loses about 26% of its buying power over the same decade.
Why is assuming a constant rate a simplification?: Real inflation moves year to year — some years 1%, some years 8%. This tool applies one fixed rate to every year because that keeps it transparent and lets you test scenarios. The trade-off is that it's an estimate, not a prediction. For planning over long horizons, run a few rates (low, central, high) and treat the spread as your uncertainty band.
Where do I find real inflation data?: Use official statistical agencies rather than this tool's assumption. In the US the Bureau of Labor Statistics publishes the Consumer Price Index (CPI) at bls.gov. For international and comparative figures, the OECD publishes harmonised inflation data at oecd.org. This calculator never invents CPI numbers — you supply the rate.
What is the rule of 72 for inflation?: Divide 72 by the annual inflation rate to estimate how many years it takes for prices to roughly double (or, equivalently, for money to lose about half its purchasing power). At 3% inflation, prices double in about 72 ÷ 3 = 24 years. At 6%, about 12 years. It's a quick mental check; the calculator gives the exact figure.
Is this calculator in today's dollars or future dollars?: Both, depending on the output. Future cost is expressed in future (nominal) dollars — the actual sticker price you'd expect to pay later. Purchasing power is expressed in today's (real) dollars — what your money would buy at today's prices. Don't mix them in the same comparison.
What rate should I enter?: There's no single right answer — that's why the rate is yours to choose. Many central banks target around 2% annual inflation as 'price stability,' so 2-3% is a common baseline assumption for long-run planning in developed economies. If you're modelling a high-inflation environment or a specific category that rises faster (like tuition or healthcare), enter a higher rate. Check an official source for the recent actual rate before deciding.

About

Nominal vs. real

Future cost is a nominal figure (more dollars, same goods). Purchasing power is a real figure (same dollars, fewer goods). The two are reciprocals of the same growth factor (1+rate)^years, which is why one rises by exactly the proportion the other falls relative to the original amount.

What this isn't

A CPI lookup, a price-index forecaster, or a wage/cost-of-living model. It applies one constant rate you supply and assumes nothing about how that rate was derived. For authoritative inflation statistics, go to the BLS or OECD; for personalised planning, talk to a financial professional.

Sources & references

Authoritative references behind the math, constants, and tables on this page. Verified by Buğra Sözeri on the dates shown and re-checked at every deploy.

U.S. Bureau of Labor Statistics — Authoritative source for real US inflation data (Consumer Price Index). This calculator does not fetch CPI figures — use the BLS for actual published rates.(as of 2026-06-27)
OECD — Source for harmonised international inflation statistics and cross-country comparisons. Referenced as where to obtain real inflation data rather than this tool's assumed rate.(as of 2026-06-27)