Calculate inflation

Project a future price and the purchasing power of today's money under a constant annual inflation or deflation rate.

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ToolInflation Calculator
Input
Output
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How it works

The annual percentage becomes a compound factor raised to the number of years. Future cost multiplies by that factor, while purchasing power divides by it; 3% is an editable scenario rather than a current CPI claim.

Formula
factor = (1 + annual rate)ʸᵉᵃʳˢ
purchasing power = amount today ÷ factor
  • Total inflation and purchasing-power loss are two views of the same compound factor.
  • Negative rates model deflation instead of being silently clamped to zero.

Worked example

Ten years at 3%
What £1,000 becomes, and what it is worth
Input
											Amount: 1000
Years: 10
Rate percent: 3
Output
												Future cost: 1343.92
Purchasing power: 744.09
Lost value: 255.91
Lost percent: 25.59
Total inflation: 34.39

When to use this

Household budgets, salary negotiations, and retirement projections use inflation assumptions to translate between nominal future money and today's spending power.

Edge cases

  • At 0 years the compound factor is 1, so future cost and purchasing power equal the original amount.
  • A negative rate models deflation and increases purchasing power instead of forcing the result to an inflation loss.
  • A 100% annual rate doubles the future basket cost each year because rates compound rather than add.

References