ToolPetal
Inflation calculator
- Runs on your device
- Nothing uploaded
- Free, no sign-up
| Year | Inflated cost of basket | Purchasing power of fixed cash |
|---|
Client-side only. The rate you enter is an assumption compounded yearly, not a forecast of CPI or any country's official index. Not financial advice.
Reverse: rate from A to B, or years to half
$50,000 cash sitting still at 3% for 20 years
Leave $50,000 under the mattress. Assume prices rise 3% every year for 20 years. The same basket that costs $50,000 today would cost $90,305.56. The cash still says $50,000 on the bill, but it only buys what $27,683.79 buys today. That is a real loss of $22,316.21, or about 44.63% of the starting purchasing power.
Nothing dramatic happens in year one: the basket moves to $51,500 and the cash is worth $48,543.69 in today's terms. The damage is the compounding. After 10 years the basket is at $67,195.82 and the cash buys $37,204.70 of today's goods. The second decade takes more than the first.
If that cash instead earned a return that beat inflation, the picture flips. The compound interest calculator is the tool for that side of the story. This page only answers what inflation does when the nominal amount does not grow.
Same $10,000 basket at 2%, 3%, 5%, and 7% over 15 years
Rate choice dominates the result. Here is one basket, four constant rates, fifteen years:
| Annual rate | Future cost | Purchasing power of $10,000 cash |
|---|---|---|
| 2% | $13,458.68 | $7,430.15 |
| 3% | $15,579.67 | $6,418.62 |
| 5% | $20,789.28 | $4,810.17 |
| 7% | $27,590.32 | $3,624.46 |
Moving from 3% to 5% lifts future cost by about $5,210 and cuts the real value of cash by about $1,608. At 7%, cash keeps only about 36% of its starting buying power after 15 years. When you pick a planning rate, small differences compound into large gaps.
Salary that keeps pace
To hold real income flat, the raise each year has to match the inflation rate you assume. At 3%, a $60,000 salary needs a 3% raise to $61,800 next year, then another 3% on the new figure, and so on. After 10 years of matching 3% raises, the nominal salary is about $80,634.98, a cumulative increase of roughly 34.39% versus the starting paycheck. Miss those raises and the same $60,000 buys only about $44,645.63 of today's goods after a decade.
That is the same math as the purchasing-power column above, applied to wages. The page does not model taxes, bonuses, or step raises. It only shows that "a 3% raise" and "3% inflation" cancel each other in real terms when both are constant.
What this page leaves out
- CPI basket drift. Official indices replace goods and tweak weights over time. A single constant rate ignores that.
- Housing vs food vs tuition. Your personal inflation can diverge hard from the headline number. Pick a rate that matches the costs you care about.
- Hyperinflation and currency collapses. Extreme regimes need different models and often monthly compounding. This page is for ordinary planning rates.
- Country indices. US CPI, India CPI, Eurozone HICP and the rest are not interchangeable. Enter the rate that fits your context.
- Taxes and investment returns. After-tax yields and portfolio growth are out of scope. Use the related return tools for that.
- Monthly vs yearly compounding. Results here compound once a year. A monthly CPI path will differ by small amounts.
FAQ
What is the difference between future cost and purchasing power?
Future cost asks how much a basket that costs P today will cost after n years at rate r: P times (1+r) to the n. Purchasing power asks the opposite: if you hold a fixed nominal amount P, how much of today's basket can that cash buy after n years: P divided by (1+r) to the n. Same rate, two directions.
Which inflation rate should I enter?
Use a planning assumption, not a promise. Many long-range plans start near 2% to 3% for a broad consumer basket. Your rent, food, or tuition may run higher or lower than the headline CPI. This page does not forecast CPI; it compounds whatever rate you type.
Does a negative rate work (deflation)?
Yes, as long as the rate is greater than -100%. Future cost falls and purchasing power of cash rises. Rates at -100% or below are rejected because the factor hits zero or flips sign.
How do I find the rate that turns amount A into amount B?
Use the reverse fieldset. Enter the start amount, the end amount, and the years between them. The solved rate is (end/start) to the power of 1/n, minus 1, shown as a percent per year.
How many years until purchasing power halves?
At a constant positive inflation rate r, cash halves in real terms after ln(2) / ln(1+r) years. At 3% that is about 23.45 years. At 7% it is about 10.24 years. Enter the rate in the reverse fieldset to solve it on this page.
Is my data uploaded?
No. The numbers you type are used in this browser tab only. Nothing is sent to ToolPetal or kept after you close the page.