Aurora Finance
Calculator

Inflation calculator

Inflation quietly erodes purchasing power. Money left in cash steadily loses real value. This calculator shows exactly how much.

Updated July 2026
$
%
Future purchasing power
$55,368
In today's dollars
Purchasing power lost
$44,632

How it works

Future Purchasing Power = Present Value / (1 + i)^t
  • Present Value is the amount today.
  • i is the annual inflation rate as a decimal (3% = 0.03).
  • t is the number of years.
  • Result tells you what today's dollars will be worth in future purchasing power.

Worked examples

  • $100,000 at 3% inflation for 20 years is worth about $55,000 in today's purchasing power.
  • At 5% inflation, the same $100,000 is worth about $37,700 after 20 years.
  • Cash in a savings account earning less than inflation loses real value each year.

Frequently asked questions

What is a typical inflation rate?

Central banks in most developed economies target around 2%. Actual inflation varies year to year, and personal inflation depends on your specific spending mix.

How do I protect against inflation?

Stocks and real estate historically outpace inflation over the long run. Inflation-protected bonds (TIPS, index-linked gilts) and I Bonds explicitly track inflation.

Is inflation always bad?

Modest, stable inflation (~2%) is considered healthy for growth. High or unstable inflation erodes savings and complicates planning.

Related

Inflation (glossary)
Definition and effects.
Understanding inflation
Full guide with protection strategies.
Compound interest calculator
The other side of the coin.
Educational information only. Not personalised financial advice. Consult a qualified professional for decisions specific to your situation.