Inflation

See what something that costs a certain amount today will cost in the future at a steady annual inflation rate. A sobering way to plan for tuition, healthcare or retirement expenses.

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💡 Good to know: At 3% inflation, prices roughly double every 24 years — the Rule of 72 works on inflation just as well as on returns.

Worked example

Future cost: $1,343.92

How it’s solved

Worked on the example above, step by step — follow along and you can do it on paper next time, no tool required.

Inflation compounds: each year prices rise by the rate, so multiply by (1 + rate) once per year.
Yearly growth factor = 1 + rate ÷ 100
1 + 3 ÷ 100 = 1.03
Raise it to the number of years, then multiply the amount
$1,000.00 × 1.03^10 = $1,343.92

Learn the method

Inputs

Amount $
1000
Inflation %/yr
3
Years
10

Frequently asked

How is future cost calculated?

Future cost = amount × (1 + rate ÷ 100)ʸ, compounding the inflation rate over the number of years.

Is this the same as loss of purchasing power?

It's the flip side — as prices rise, the same dollars buy less, so budget for the higher future figure.