Purchasing power of an amount across years - past and future.
Future = Today / (1 + inflation)ⁿ. With 3 % annual inflation, money loses about 26 % of its purchasing power over 10 years and 45 % over 20 years.
Money is a unit of account — but it's an unstable unit. A euro in 2026 buys less than a euro in 2006 did, because the general price level has risen. Inflation is the slow erosion of purchasing power; over a working life it can shrink the real value of cash savings by half or more. People consistently underestimate this because the change is gradual and nominal numbers always go up: a 50 000 € salary in 2026 feels better than a 35 000 € salary in 2006 even if their real purchasing power is identical. The calculator translates between nominal and real values in either direction — what does X today cost in Y years' time at expected inflation, or what did Y in the past correspond to in today's money — so you can compare salaries, pensions, target savings goals, or historical prices on a level field.
A single equation in two directions: - Future direction (today's amount → future purchasing power): future_amount = today / (1 + inflation_rate)^years. The future amount is the equivalent purchasing power of today's amount expressed in future euros — i.e., what real value you can still buy if prices have risen at the given rate. - Past direction (today's amount ← past): past_amount = today / (1 + inflation_rate)^years. Same formula, but the interpretation is "what amount in past euros has the same purchasing power as today's amount".
The inflation factor is the cumulative price multiplier: (1 + r)^n. At 3 %/yr over 20 years, the factor is 1.806 — prices have nearly doubled, purchasing power has shrunk by 45 %.
Pick the direction: forward or backward. Enter the amount in today's currency, the expected (or historical) annual inflation rate, and the number of years. The result panel shows the equivalent value in the other end of the time horizon, the difference, the cumulative inflation factor, and a curve of real value over time.
How much will today's 50 000 € salary be worth in real terms in 20 years at 3 % inflation? - Factor: 1.03^20 = 1.806. - Equivalent: 50 000 / 1.806 = 27 685 € in today's purchasing power. - Loss: 22 315 €, or 44.6 %.
What did a 1 000 € expense in 1990 correspond to in 2025 dollars at 2.5 % long-run inflation? (n = 35.) - Factor: 1.025^35 = 2.373. - 1 000 × 2.373 = 2 373 € in 2025 money (forward direction here).
A salary of 35 000 € in 2006 vs 50 000 € in 2026 (n = 20, assume 1.8 % avg in EU): factor = 1.018^20 = 1.430. 35 000 × 1.430 = 50 050 € — essentially identical in real terms.
Headline inflation vs core. Statistics offices report multiple measures: HICP (EU harmonized), CPI (US), CPIH (UK including housing), core (excluding food and energy), wage inflation, asset inflation. They diverge — at end-2024 EU HICP was 2.4 % but house prices in core capitals had risen 6 %/year for a decade. Pick the index that matches your use case (consumer expenses → CPI/HICP; housing → property index; salary → wage inflation).
Long-run averages are not stable. France averaged ~2 % over 1995–2020; the US averaged ~2.5 %. But individual years range from −0.4 % (deflation, 2009) to 9.0 % (2022). A 30-year projection at the historical average can be wildly off if the next decade is structurally different — energy transition, demographic decline and AI productivity shocks all push in different directions.
Personal inflation rate is not headline inflation. Your basket differs from the statistical office's basket. Renters with rising rents see a different inflation than owners with fixed mortgages. Education-heavy households face higher inflation than retirees with mostly food and healthcare expenses. Adjust the input rate up or down by 1–2 % for personal calibration.
Compound vs continuous compounding. The calc uses annual compounding (1 + r)^n, the standard for headline inflation. Continuous compounding (e^(rt)) gives a slightly higher factor at the same rate. The difference is < 1 % at typical rates and horizons.
Negative years and deflation. The calc handles negative inflation (deflation) symmetrically — a −1 % rate over 10 years grows purchasing power by ~10.5 %. Sustained deflation is rare but happens (Japan in the 1990s–2010s).
Currency effects. Inflation rates differ across countries. If you're projecting an emigration scenario (saving in EUR, retiring in USD or BRL), the relevant inflation is the destination's, plus any long-run currency drift.