How do I calculate the future cost of something?
- 1Enter a price or a sum of money today.
- 2Enter the average yearly inflation rate — or pick a country's official target as a starting point.
- 3Enter how many years ahead you want to look.
- 4Read the future cost, what your money will be worth in today's terms, and the year-by-year table.
What is the formula for inflation over many years?
- 01Growth factor = (1 + r)ⁿ (r = inflation rate ÷ 100, n = years)
- 02Future cost = amount today × (1 + r)ⁿ
- 03Worth in today's money = amount ÷ (1 + r)ⁿ
- 04Buying power lost = 1 − 1 ÷ (1 + r)ⁿ
- 05Years until money buys half = ln 2 ÷ ln(1 + r) (≈ 70 ÷ rate)
Inflation compounds like growth on savings, but against you: this year's price rise is added on top of last year's. At 5% a year, something that costs 1,000 today costs 1,050 next year and 1,628.89 after 10 years — not 1,500.
The same factor works the other way for money you keep as cash. 1,000 kept for 10 years at 5% inflation buys only what 613.91 buys today. That is its purchasing power.
The rule of 70 gives a quick estimate: divide 70 by the inflation rate to get the years until prices double and cash buys half as much — about 14 years at 5%, 35 years at 2%.
The calculator uses one average rate. Real inflation moves around, and official figures are averages over a basket of goods, so your own costs may rise faster or slower.
What will 1,000 be worth in 10 years?
Something that costs 1,000 today, with 5% inflation a year for 10 years:
prices multiply by 1.6289, so it will cost about 1,628.89.
1,000 kept as cash will buy only what 613.91 buys today — 38.6% of its buying power is gone.
Good to know
- Plan big goals — school fees, a wedding, Hajj, a house — in future prices, not today's.
- Cash under the mattress or in a 0% account loses buying power every year; inflation is the reason to invest for long goals.
- Some costs rise faster than the average: education and health care often do, gadgets often get cheaper.
- Use the rule of 70: 70 ÷ inflation rate ≈ years for prices to double.
Inflation questions people ask
How do you calculate inflation over several years?
Multiply by (1 + rate) once for every year: future price = price today × (1 + r)ⁿ. At 6% for 10 years the factor is 1.06¹⁰ = 1.7908, so 100,000 today becomes about 179,085.
What will 100 be worth in 10 years?
At 3% inflation a year, 100 will buy what 74.41 buys today (100 ÷ 1.03¹⁰). The same basket that costs 100 today will cost about 134.39.
How much will 1 lakh be worth after 10 years?
At 6% inflation a year, 1,00,000 kept as cash will buy only what about 55,839 buys today. To keep up, you would need about 1,79,085 in 10 years.
What is a normal inflation rate?
Most central banks in rich countries aim for about 2% a year. India's RBI targets 4% (with a 2–6% band) and Pakistan's SBP aims for 5–7% over the medium term. Actual inflation is often outside these targets, sometimes far above them.
What is the rule of 70?
Divide 70 by the yearly inflation rate to estimate how many years it takes prices to double. At 2% that is about 35 years, at 7% about 10 years.
Is purchasing power the same as the real value of money?
Yes. Purchasing power, or real value, is what an amount can actually buy. When prices rise 5%, the same note buys about 4.8% less (1 − 1 ÷ 1.05).
Sources
- U.S. Federal Reserve – Why does the Fed aim for 2 percent inflation over time?
- European Central Bank – Monetary policy strategy (2% target)
- Bank of England – Inflation and the 2% target
- Bank of Canada – Inflation-control target
- Reserve Bank of Australia – Inflation target (2–3%)
- Bank of Japan – Price stability target of 2%
- Reserve Bank of India – Flexible inflation targeting, 4% ± 2% (notified for April 2026 – March 2031)
- State Bank of Pakistan – Monetary policy (medium-term inflation target 5–7%)
- U.S. Bureau of Labor Statistics – CPI inflation calculator
Formulas last reviewed: September 30, 2026 ·How we check our formulas