Using the Inflation Calculator
Use the future-equivalent figure when asking how much money might be needed later. Use the purchasing-power figure when asking what a fixed future balance is worth in today’s terms. These are related questions, but their answers move in opposite directions.
Worked example
Use the example inputs below to reproduce this result. These are the form's starting values, not recommended targets. Changing your inputs updates your result above; this worked example stays fixed for comparison. Results are rounded for display.
Example inputs
- Amount today
- 1000
- Assumed annual inflation (%)
- 3
- Years
- 10
Example result
- Future equivalent
- 1,343.92
- Future amount in today’s purchasing power
- 744.09
Method and assumptions
Uses a constant inflation assumption, not historical CPI data.
Identify the base before applying a rate
A percentage always applies to a particular base amount. Write down which amount is being multiplied and whether the rate adds to it, subtracts from it or converts it to another unit. Applying the same percentage to a different base produces a different result. For a real transaction, use the rate and rounding convention that actually apply.
Common question
Does a negative rate work?
Yes, within the supported range. A negative assumption represents falling prices, so the future cost of the same basket falls while the purchasing power of an unchanged sum rises.
Guide updated .