CalculateY
Quick Answer
At 3% annual inflation, $100 today will have the purchasing power of approximately $74.41 in 10 years. Equivalently, an item costing $100 today would cost an estimated $134.39 in 10 years.
Common Examples
| Input | Result |
|---|---|
| $100 at 3% inflation for 10 years | Estimated future cost: $134.39 |
| $1,000 at 2.5% inflation for 20 years | Estimated future cost: $1,638.62 |
| $50,000 at 4% inflation for 30 years | Estimated future cost: $162,170 |
| $500 at 3.5% inflation for 5 years | Estimated future cost: $593.84 |
How It Works
This calculator uses the compound growth formula applied to inflation:
Future Cost = Present Value × (1 + r)^n
Purchasing Power = Present Value / (1 + r)^n
Where:
- r = annual inflation rate (decimal)
- n = number of years
The cumulative inflation percentage illustrates the total price increase over the full period.
Worked Example
To estimate the future cost of a $100 item at 3% annual inflation over 10 years: Future Cost = $100 x (1.03)^10 = $100 x 1.3439 ≈ $134.39. The same item would cost an estimated 34.4% more. Conversely, $100 held in cash would buy only about $74.41 worth of today’s goods.
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Frequently Asked Questions
What inflation rate should I use?
The long-term US historical average is approximately 3% per year. Recent years have seen higher inflation (6–9% in 2022). For long-term planning, 2.5%–3.5% is a commonly used estimate, though actual inflation varies significantly year to year.
What does purchasing power mean?
Purchasing power represents what your money can actually buy. If inflation is 3% per year, $100 today would only buy approximately $74 worth of today's goods in 10 years. The dollars still exist, but each dollar buys less.
Does this account for salary increases?
No. This calculator only estimates the effect of inflation on a fixed amount. In practice, wages often increase over time (though not always at the same rate as inflation).