Inflation Calculator Formula
Understand the math behind the inflation calculator. Each variable explained with a worked example.
Formulas Used
Future Cost
future_cost = current_amount * pow(1 + inflation_rate / 100, years)Purchasing Power of Current $
purchasing_power = current_amount / pow(1 + inflation_rate / 100, years)Cumulative Inflation
total_inflation = (pow(1 + inflation_rate / 100, years) - 1) * 100Variables
| Variable | Description | Default |
|---|---|---|
current_amount | Current Amount(USD) | 100 |
inflation_rate | Annual Inflation Rate(%) | 3 |
years | Number of Years(years) | 10 |
How It Works
Inflation Formula
Future Cost = Current Amount × (1 + r)^n
Where r = annual inflation rate and n = number of years. Inflation erodes purchasing power over time.
Worked Example
$100 with 3% annual inflation over 10 years.
current_amount = 100inflation_rate = 3years = 10
- 01Future cost = $100 × (1.03)^10
- 02= $100 × 1.3439 = $134.39
- 03Today's $100 will only buy $74.41 worth of goods in 10 years
- 04Cumulative inflation = 34.4%
Frequently Asked Questions
What is the average inflation rate?
The US long-term average is about 3% per year. Recent years have seen higher inflation (6-9% in 2022).
Learn More
Guide
Inflation Impact on Savings
Understand how inflation erodes your savings and purchasing power over time. Learn strategies to protect your money, calculate real returns, and invest to outpace inflation.
Ready to run the numbers?
Open Inflation Calculator