Inflation Calculator Formula

Understand the math behind the inflation calculator. Each variable explained with a worked example.

Use the Inflation Calculator

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) * 100

Variables

VariableDescriptionDefault
current_amountCurrent Amount(USD)100
inflation_rateAnnual Inflation Rate(%)3
yearsNumber 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
  1. 01Future cost = $100 × (1.03)^10
  2. 02= $100 × 1.3439 = $134.39
  3. 03Today's $100 will only buy $74.41 worth of goods in 10 years
  4. 04Cumulative inflation = 34.4%

Ready to run the numbers?

Open Inflation Calculator