Inflation is the slow rise in prices, and it means the same money buys less as time passes. This calculator helps you see that effect in two ways. Choose the first option if you want to know what something costing a certain amount today may cost in the future. Enter the amount, the average yearly inflation rate and the number of years.
You will see the future price of the same item and, just as important, how much buying power your original amount keeps. If prices rise three percent a year for ten years, a hundred dollars today will buy noticeably less at the end.
Choose the second option if you already know an old price and a new price for the same thing, such as a basket of groceries, rent or a bus ticket. Enter both prices and the number of years between them. The tool works out the average yearly inflation rate, the total change and how long prices would take to double at that pace. This is a quick way to check whether your own costs are rising faster or slower than the numbers you hear about.
For the future price: future price = amount x (1 + rate) raised to the number of years, where the rate is written as a decimal. Buying power is the amount divided by the same growth factor.
For the average rate from two prices: rate = (new price / old price) raised to 1 / years, minus 1. The total change is (new price / old price) minus 1. The doubling time is the natural log of 2 divided by the natural log of (1 + rate).