Inflation Impact Calculator
Enter an amount, an assumed inflation rate and a number of years to see its future real value and how much purchasing power it loses. Add an expected return to check whether your money beats inflation.
Last updated:
Input
×10,000
%
yr
%
Leave at 0 to see cash held as-is, or enter a return to check whether it beats inflation.
Result
Real value in 20 years
$3,364,857.00
$5,000,000.00 today loses $1,635,143.00 (32.7%) of its purchasing power.
Cost of the same goods
$7,429,737.00
Value lost
$1,635,143.00
Price multiple
1.49x
How it works
- The price multiple is (1 + inflation rate)^years. The cost of the same goods in the future is amount today × price multiple.
- If the money is held as cash, its future real value is amount today ÷ price multiple. The value lost is amount today − future real value, and the percentage lost is 1 − 1 ÷ price multiple.
- When an expected annual return is entered, the future nominal amount is amount today ×(1 + return)^years, and its real value is that nominal amount ÷ price multiple.
- The real rate of return uses the Fisher equation, (1 + return) ÷ (1 + inflation rate) − 1. Subtracting the inflation rate from the return is only an approximation; this tool uses the exact formula.
- If the return is at or above the inflation rate, purchasing power is preserved. If it is below, the nominal amount grows but buying power still falls. Entering a negative inflation rate (deflation) makes the real value of cash rise.
- This is an estimate assuming a constant inflation rate and return every year. Actual inflation varies year to year, and taxes and fees are not considered. Results are a guide only; make investment decisions at your own responsibility.
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