Inflation calculator: what your money will be worth

Inflation is the rate at which prices rise, so the same note buys a little less each year. This calculator turns that slow erosion into a figure you can act on. Pick a rate, choose a mode, and it tells you what something will cost later, what money you’ll receive later is worth today, or what a return is really earning once rising prices are stripped out.

The three modes

The tool answers three different questions, and confusing them is where most inflation maths goes wrong.

Future price asks what a fixed basket will cost after years of compounding. At 2% a year, €100 today costs €121.90 in ten years’ time. The rise is not a straight line: prices grow on top of prices, the same way interest does.

Today’s value of future money runs that logic backwards. Money you are promised years from now is worth less than its face value, because it will buy less when it arrives. At 2% inflation, €10,000 received in 30 years buys what €5,520.71 buys today.

Real rate strips inflation out of a return. A 5% nominal return under 2% inflation is not 5% of extra buying power. Its real rate is 2.94%.

The mode that changes minds

The middle mode is the one people underestimate. A pension, a payout or a maturity value quoted for decades ahead sounds solid because it is a large, specific number. But that number is in future money, and future money is quietly smaller than it looks.

Consider a figure of €26,533 payable in 20 years. At 2% inflation, that buys about €17,856 of today’s purchasing power. The headline hasn’t lied, but it speaks in a currency that will have shrunk by the time it arrives. Comparing a distant lump sum against money in hand needs both in the same terms, and this mode puts them there.

Real rates, done exactly

To find the real return, people often just subtract: 5% return minus 2% inflation, call it 3%. That shortcut is close at small numbers and wrong at large ones, because return and inflation compound against each other rather than adding.

The correct method is the Fisher relation, which divides rather than subtracts, and it matters most when both numbers are big. Take a 10% return under 8% inflation. Subtraction says 2%; the true real rate is 1.85%. The gap looks small, but over a long horizon that error compounds into a materially wrong answer, and it always flatters the return. When inflation outruns the return the effect reverses: a 2% return under 5% inflation is a real rate of minus 2.86%, meaning buying power falls even as the balance rises.

Method note

You choose the inflation rate. Around does not predict inflation and does not report live figures, because a forecast dressed as a fact would be worse than none. Feeding your own assumption in lets you test a range rather than trust a single guess.

Where the number matters, test more than one rate. At 2%, prices roughly double over 35 years, so €100 today costs €199.99 then; push the rate to 5% and the ten-year cost of that same €100 jumps to €162.89; at 10% it reaches €259.37. Small changes in the rate become large changes over time — which is why the assumption is yours to set rather than ours to bury.

Economists generally group the causes of inflation into demand pressures, cost pressures and expectations, and the balance between them is contested rather than settled. The 2% target many central banks aim for, including the figure set out in the ECB’s published explainer, is commonly justified as a buffer against falling prices and as room for prices to adjust. Everything here runs in your browser; no figure you enter leaves your device.