Inflation-adjusted growth calculator
Separate nominal growth from purchasing power.
- Formula and assumptions shown
- Table and CSV export
- Runs in your browser
How it works
The calculator multiplies today's entered cost by the inflation factor to estimate its future equivalent cost. It also divides that same dollar amount by the factor to show what a fixed nominal amount of that size in the future would equal in today's dollars.
Future equivalent cost = cost today × (1 + inflation)^years; today's-dollar value of the same fixed nominal amount = amount ÷ (1 + inflation)^years.
Both numbers use a constant user-entered assumption. They are scenario conversions, not CPI measurements or an inflation forecast; use other assumptions to explore different paths.
Assumptions
- Inflation is compounded once per modeled year.
- The entered inflation assumption remains constant.
- The second figure converts a hypothetical unchanged nominal amount into today's dollars; it is not a forecast of the same purchase's cost.
- Investment returns, taxes, fees, withdrawals, and changing spending are excluded.
Worked example
$10,000 and 2% inflation for ten years
The future equivalent cost is $10,000 × 1.02^10 = about $12,189.94. The same fixed $10,000 nominal amount in year ten is worth $10,000 ÷ 1.02^10 = about $8,203.48 in today's dollars.
Step by step
- Turn the rate into a yearly factor. 2% inflation means prices are multiplied by 1.02 each modeled year.
- Compound the factor over the term. 1.02^10 = 1.218994, so prices are about 21.9% higher after ten years.
- Find the future equivalent cost. $10,000 × 1.218994 = $12,189.94. The Increase figure is $12,189.94 − $10,000 = $2,189.94.
- Find the value in today’s dollars. A fixed $10,000 received in year ten is worth $10,000 ÷ 1.218994 = $8,203.48 in today’s dollars.
- Check the first table row. After one year the future cost is $10,000 × 1.02 = $10,200 and the purchasing power is $10,000 ÷ 1.02 = $9,803.92.
How to read your result
Future equivalent cost is what the same basket of goods would cost at the end of the term if prices rose by the entered rate every year. Increase is that cost minus today’s amount. Today’s dollars equivalent runs the conversion the other way: it shows what a fixed amount received in the future would buy at today’s prices.
The two figures answer different questions. The first sizes a future goal, such as a price you expect to pay later. The second shows how much a fixed payment, balance, or unchanged salary loses in buying power. The table and chart show both paths year by year, one rising and one falling from the same starting amount.
The rate is your assumption and stays constant for the whole term. The page does not look up the Consumer Price Index or forecast inflation, and it adds no investment return. To see growth and inflation together, compare a compound interest projection with this page’s today’s-dollars figure over the same years.
What changes the result most
- Inflation rate
- At 3% instead of 2% over ten years, the future cost of $10,000 is $13,439.16 and a fixed $10,000 is worth $7,440.94 in today’s dollars.
- Time
- At 2% over 20 years, the future cost is $14,859.47 and the today’s-dollar value falls to $6,729.71. At 3% over 20 years the figures are $18,061.11 and $5,536.76.
Questions
Does it use live inflation data?
No. Inflation is an assumption you enter. The calculator does not fetch an index or forecast.
What does future equivalent cost mean?
It estimates how much money may be needed in the future to buy what today's cost represents under the entered inflation assumption.
Can I include investment returns?
No. This page isolates purchasing-power change. Use the compound interest calculator when you also want contributions and an assumed return.
How do you calculate the inflation rate?
Divide the later price index value by the earlier one, subtract 1, and multiply by 100. With the Consumer Price Index, (CPI in the later month ÷ CPI in the earlier month − 1) × 100 gives the percentage change. For an average yearly rate over several years, raise the ratio to the power of 1 ÷ years before subtracting 1, the same calculation as CAGR.
How is the inflation rate measured?
In the United States the most cited measure is the Consumer Price Index from the Bureau of Labor Statistics, which tracks the average change over time in prices paid by urban consumers for a market basket of goods and services. This calculator does not use CPI data; it applies the constant rate you enter.
More in Savings & investing
Sources
These references explain the concepts behind the calculation. They do not endorse this site. Estimates leave out any cost or condition you did not enter.