How it is calculated
Each year, prices are multiplied by (1 + inflation). Purchasing power is the reverse step: today’s sum is divided by that same factor.
Future price = Amount × (1 + inflation)^years
Where the numbers come from
- Amount today
- Inflation per year — unit in the field: %
- Years — unit in the field: years
Example
100 000 currency units at 8% a year correspond, after 10 years, to goods of about 215 892 currency units. Those 100 000 currency units will then buy about what 46 319 currency units buy today.
Questions
Where do I get the inflation percent?
For a rough household figure, your own estimate or an average of recent years will do. The calculator does not insert an official index.
Is this compound interest?
Yes. Inflation of 10% for two years in a row is not 20%, it is 21%.
Can I compare it with a deposit?
Work out the deposit on its own, and put the future price of the goods beside it. If the deposit grew by less than the prices, buying power fell.