What does inflation do to money?
It raises prices over time, which means the same amount of money buys less. This calculator shows both the higher future price and the shrunken real value of money you hold.
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Inflation Impact Calculator
See how inflation raises future prices and erodes the real value of money held over time.
future price = amount × (1 + rate)^years ; real value = amount / (1 + rate)^years
Frequently asked questions
What is purchasing power?
What your money can actually buy. If prices rise 6% a year, money sitting idle loses about 6% of its purchasing power each year even though the number on the note is unchanged.
Why compound the rate?
Because inflation stacks year on year. 6% for ten years is not 60%; it is 1.06 to the power 10, which is about 79%, because each year's rise sits on top of the last.
How do I protect against inflation?
Generally by holding assets that grow at least as fast as prices, rather than idle cash. The investment-return calculator lets you compare growth rates against the inflation rate.
Is this the same as the real interest rate?
Related. The real return on savings is roughly the interest rate minus inflation. If your savings earn less than inflation, you are quietly losing ground.