Finance
Inflation calculator
See what a sum of money will really be worth after years of inflation — how much purchasing power it keeps, how much it quietly loses, and what you’d need to match it.
- Worth in today’s money
- $5,537
- Purchasing power lost
- $4,463
- Needed to match it
- $18,061
Assumes a constant annual inflation rate. “Needed to match it” is how many future dollars it would take to buy what your amount buys today.
The quiet tax on cash
Inflation doesn’t change the number in your account — it changes what that number can buy. A steady 3% a year sounds small, but it compounds: over 20 years, $10,000 in cash holds only about $5,500 of today’s purchasing power. The rest wasn’t spent; it simply stopped being able to buy as much.
Why it changes financial decisions
Once you can see inflation, “play it safe in cash” looks riskier for long-term goals. The counterweight is growth — the reason people invest money they won’t need soon. See how balances can grow with the compound interest calculator, and learn the trade-offs in the Finance subject.
Frequently asked questions
- What is inflation?
- Inflation is a general rise in prices over time, which means each dollar buys a little less. At 3% annual inflation, something that costs $100 this year costs about $103 next year — and your cash loses purchasing power even if its nominal amount doesn’t change.
- How does inflation reduce the value of money?
- Money’s value is what it can buy. If prices rise 3% a year, $10,000 kept in cash buys about 3% less each year. Over 20 years at 3%, its purchasing power falls to roughly $5,500 in today’s terms — nearly half.
- Isn’t holding cash the safe option?
- Cash is safe from market swings but not from inflation, which erodes it quietly and reliably. That’s why money you won’t need for years is often invested rather than left entirely in cash — to at least keep pace with rising prices.
- Is this calculator free?
- Yes — no sign-up, and it runs in your browser. It assumes a constant rate, so treat results as estimates.