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Inflation & Purchasing Power
Works out what amount in the future matches today's purchasing power – or what a future amount is worth today.
Type values, assign them with the value keys and press "Solve". It is the same financial calculator as under "Calculator" in the menu above.
Examples for this calculator
Each example is a story with explanation and a "what you learn" takeaway.
Formula
FV = amount · (1 + inflation)^n
How the formula works
FV = amount·(1+inflation)ⁿ – the same compound-interest formula, only with the inflation rate as the "rate". It shows what nominal amount will be needed in the future to maintain today's purchasing power. The erosion of money acts exponentially, just like compound interest – only against you.
Compounding or discounting with the inflation rate.
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