What this inflation calculator measures
Inflation describes how the general level of prices changes over time. This calculator keeps two different questions separate: how much today's basket may cost in the future, and how much today's unchanged cash may buy after inflation. Those values move in opposite directions when the assumed inflation rate is positive.
Future cost
Current cost × (1 + r)ⁿ
The future amount needed to buy an equivalent basket under a constant annual rate.
Future purchasing power
Current cash ÷ (1 + r)ⁿ
The value of unchanged future cash expressed in today's purchasing power.
How to compare historical CPI values correctly
Choose a CPI series that matches the country, population, category, and adjustment you need. Enter two index values from that same series. The calculator multiplies the starting amount by ending CPI ÷ starting CPI. Mixing different series or reference bases can produce a meaningless result.
Official agencies may revise data, change reference bases, or publish monthly and annual series separately. Check the series notes before using a value.
Nominal return versus real return
Nominal return measures the change in an investment balance before inflation. Real return measures the change in purchasing power. The exact annual real return is (1 + nominal return) ÷ (1 + inflation) − 1. The result is still a simplified illustration because it assumes constant annual rates and excludes taxes, fees, contributions, withdrawals, and market volatility.
Continue Your Financial Planning
Turn a future cost into a monthly plan with the Savings Goal Calculator, model nominal growth with the Compound Interest Calculator, and compare nominal and real performance with the ROI Calculator. Use projected expenses in the Retirement Corpus & Income Calculator.