What $100 today will be worth in 20 years
Inflation compounds like interest, only in the other direction.
Prices compound
If prices rise 3% a year, a basket that costs $100 today costs $103 next year and $106.09 the year after, because the second rise applies to the already higher price. After 20 years it costs $100 × 1.03^20 = $180.61, a cumulative rise of 80.61%, not the 60% that 20 × 3% suggests.
Cash loses buying power
Turned around, $100 kept in a drawer for 20 years buys only what $55.37 buys today: purchasing power = amount ÷ (1 + rate)^years. That is a loss of 44.63% of its value. At 2%, the inflation target of many central banks including the US Federal Reserve and the European Central Bank, the same basket costs $148.59 in 20 years and $100 keeps $67.30 of today's value.
Why it matters for plans
Any goal more than a few years away should be written in future money or compared with returns after inflation. A $50,000 salary needs to grow to $67,195.82 in 10 years at 3% inflation just to stand still. Savings that earn 2% while prices rise 3% lose about 1% of buying power a year. The inflation calculator shows both the future cost and the purchasing power for any amount, rate and number of years.
Past prices need official data
This calculator projects a steady rate. For what something cost in a past year, use the consumer price index published by your country's statistics office, such as the US Bureau of Labor Statistics CPI, because actual inflation varies a lot from year to year: US consumer prices rose about 8% in 2022 and under 2% in several years of the 2010s.
A rule of thumb
Divide 72 by the inflation rate to estimate how many years it takes prices to double: about 24 years at 3%, 36 years at 2% and 12 years at 6%. It is the same rule investors use for doubling money, applied to prices.
Real returns: growth after inflation
A savings account paying 4% while prices rise 3% grows your buying power by about 1% a year, not 4%. The exact figure is (1.04 ÷ 1.03) − 1 = 0.97%. Over 20 years that difference is large: $100 at 4% grows to about $219, but in today's money that is about $121, because prices have risen too. Comparing returns after inflation is the only way to see whether money is actually growing.
Salaries and prices
A pay rise below inflation is a cut in real terms. A 2% raise in a year of 3% inflation leaves you about 1% worse off in what your pay buys. Over a career, keeping pay in line with prices requires raises that at least match inflation every year; the inflation calculator shows the salary needed to stand still for any number of years.
Different baskets, different inflation
The official rate is an average over a typical basket. Your own inflation can be higher or lower depending on what you buy: rent, energy, food and school fees have often risen faster than electronics or clothing. If one cost dominates your budget, use its own price trend as the rate.
In short
Inflation compounds: 3% a year nearly doubles prices in 24 years. Write long-term goals in future money or use returns after inflation, check pay rises against the rate, and use official price data for the past. A steady-rate projection is a planning tool, not a forecast, so try a low and a high rate to see the range. Revisit the plan when actual inflation moves far from your assumption, as it did in 2021 and 2022, and adjust savings goals and pay expectations to match.