Inflation & Purchasing Power Calculator
Calculate future purchasing power loss and equivalent future cost.
Last reviewed by the myCalculator Editorial Team
Input Parameters
Calculation Results
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Formula & How Inflation & Purchasing Power Calculator Works
Inflation raises prices over time, so the same money buys less. At a steady rate r, a cost today of C will be C × (1 + r)^years. $100 of goods at 3% inflation costs 100 × 1.03^10 = $134.39 after 10 years. The rule of 72 gives a quick estimate of the doubling time: 72 ÷ 3 = 24 years. To work out what a future sum is worth in today's money, divide by the same factor: $134.39 in 10 years is worth $100 today at 3% inflation. Use the Reserve Bank's 2 to 3% target range as a benchmark and test higher rates to see how sensitive your plan is.
- Enter Current Dollar Amount ($): Input your target parameter value.
- Enter Annual Inflation Rate (%): Input your target parameter value.
- Enter Time Horizon (Years): Input your target parameter value.
- Apply Formula: Calculate using
Future Cost = Amount × (1 + rate)^years. - Review Results: View exact computed answers, metrics, and worked mathematical proofs.
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Frequently Asked Questions (FAQs)
What is the Rule of 72?
Divide 72 by the inflation rate to estimate years required for prices to double.
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Authoritative Standards & Verified Reference Citations
Calculations and mathematical logic on this page are grounded in published statutory rules, regulatory standards, and official government data published by the following bodies:
Consumer guidance on mortgage borrowing capacity, compound interest formulas, and loan fees.
Official cash rate target announcements, monetary policy statements, and national economic statistical data.
Official U.S. Federal Funds Rate and comprehensive macroeconomic time-series data.
Key Eurozone interest rates, deposit facility rates, and monetary policy operations.
Residential mortgage serviceability buffer framework (3.0% stress test hurdle rate).
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