Inflation calculator
Estimate future cost and the real value of money with a constant inflation rate.
What this calculator covers
Use this inflation calculator to see how a constant inflation rate changes the future cost of today's dollars over time.
It also shows the inverse view so the same factor can be used to discount future nominal amounts back into today's purchasing power.
Frequently asked questions
- What inflation rate should I use?
- A commonly cited long-run average for the U.S. is around 3%, though recent years have seen higher rates and the long-run average changes over time. For planning purposes, try a few different rates to see how sensitive your result is to the assumption.
- What is the difference between future cost and present value in this calculator?
- Future cost answers "what will today's amount buy in N years at a given inflation rate?" Present value answers the reverse question: "what is a future nominal dollar worth in today's purchasing power?" Both use the same inflation factor, just applied in opposite directions.
- Does this account for compound inflation?
- Yes. The formula uses exponential compounding — (1 + rate)^years — so each year's inflation applies to the already-inflated total from the prior year, matching how inflation actually accumulates over time.
- Can I use this to estimate retirement costs?
- It is a useful starting point for rough planning. Enter your current annual expenses as the present amount and project forward by the number of years to retirement to see what the same lifestyle might cost at a given inflation rate.
Tool
Run the calculation
Result
RESULT · FUTURE COST
â„–083
Primary result
$14,593.40
$10,000.00 grows to $14,593.40 after 12 years at 3.2%, while $10,000.00 received in 12 years would be worth only $6,852.41 in today's dollars.
- Future cost
- $14,593.40
- Present value of future amount
- $6,852.41
- Inflation multiplier
- 1.4593
- Purchasing power loss
- $3,147.59
Step-by-step solution
- 1.Build the inflation multiplier: (1 + 3.2%)^12 = 1.4593.
- 2.Multiply today's amount by that factor to estimate a future cost of $14,593.40.
- 3.Use the inverse of the same factor to discount a future nominal amount back to $6,852.41 in today's dollars.
Walkthrough
Visual walkthrough
Inflation math works in both directions: grow today's cost forward or discount a future nominal amount back into today's purchasing power.
01
Build the inflation factor
(1 + 3.2%)^12
The factor captures the cumulative effect of the same annual inflation rate across the full horizon.
1.4593x
02
Project the future sticker price
Multiplying today's amount by the inflation factor estimates what the same basket of goods may cost later.
$14,593.40 future cost
03
Discount back to today's dollars
Dividing by the same factor shows how much buying power a future nominal amount really represents right now.
$6,852.41 present value