What the same goods will cost
$180,611
Inflation moves one number in two directions at once. This calculator reports both: what a sum will cost or buy in the future, and what a nominal return is actually worth once rising prices have taken their share.
Inflation is an assumption you supply, not a figure this page predicts. The two quantities are reciprocal: the cost of goods and the value of money are two ways of writing the same relationship, so a price multiplier of 1.81 and a purchasing power of 55% describe one event. The nominal return is applied separately and is also an assumption; nothing here is a forecast of prices, rates or returns.
| Horizon | Years | What the goods will cost | What the money is worth | Purchasing power lost |
|---|---|---|---|---|
| 5 years | 5 | $115,927 | $86,261 | 13.7% |
| 10 years | 10 | $134,392 | $74,409 | 25.6% |
| 15 years | 15 | $155,797 | $64,186 | 35.8% |
| 20 years | 20 | $180,611 | $55,368 | 44.6% |
| 25 years | 25 | $209,378 | $47,761 | 52.2% |
| 30 years | 30 | $242,726 | $41,199 | 58.8% |
| Inflation | Rate | Price multiplier | Cost of the same goods | Value of the money |
|---|---|---|---|---|
| 1% a year | 1.0% | 1.22 | $122,019 | $81,954 |
| 2% a year | 2.0% | 1.49 | $148,595 | $67,297 |
| 3% a year | 3.0% | 1.81 | $180,611 | $55,368 |
| 4% a year | 4.0% | 2.19 | $219,112 | $45,639 |
| 5% a year | 5.0% | 2.65 | $265,330 | $37,689 |
Inflation is usually described as prices rising, and that is only half of the arithmetic. A general rise in prices is the same event as a fall in what money buys, and the two figures are reciprocals of each other. Which one you need depends on the question you are asking, and calculators that report only one have quietly decided which question you had.
Both are shown here for the same reason they are usually separated: $180,611 and $55,368 look like an inconsistency to anyone who has not seen the pair before, and they are in fact the same fact stated twice. The first is a price in future dollars; the second is a value in today's dollars.
The rate is the only input that decides the answer, and it is the one nobody can supply with certainty. There are three defensible anchors, and they differ enough to change the conclusion.
| Anchor | Rate | Value of $100,000 after 20 years |
|---|---|---|
| The Federal Reserve's longer-run objective | 2.0% | $67,297 |
| Measured CPI-U from 1913 to 2025 | 3.15% | $53,779 |
| The rate assumed on this page | 3.0% | $55,368 |
| A 4% assumption | 4.0% | $45,639 |
Purchasing power in today's dollars, holding the amount without any return
The first is a policy target rather than an observation. The Federal Reserve states that inflation of 2 percent over the longer run, measured by the annual change in the personal consumption expenditures price index, is most consistent with its mandate. It is a commitment about where policy aims, not a description of what has happened.
The second is what happened. The CPI-U annual average stands at 9.8 for 1913 and 317.671 for 2025: a factor of 32.4 across 112 years, which compounds to approximately 3.15% a year. That single average conceals enormous variation — the deflationary years of the early 1930s, the double-digit years of the 1970s, and the recent period when price growth ran well above the long-run figure. It is a summary, not a rhythm.
There is one figure on this page that survives a wide range of inflation assumptions better than the rest, because it is a ratio rather than a level: the time for prices to double, which is exactly the time for purchasing power to halve.
The halving time is the reason long horizons dominate every other consideration in personal finance. A 30-year retirement plan at 3% does not lose 90% of its purchasing power gradually and evenly; it crosses the halfway point around year 23 and the last seven years take it further still. Any figure expressed in nominal dollars over that horizon is describing something that will not exist by the time it arrives.
This is also why the useful question is rarely what will inflation be and usually how quickly does my plan stop working if it is higher than I assumed. The scenarios table answers the second question directly by showing the same horizon at five rates, and the gap between the top and bottom rows is the size of the risk.
The last piece of the calculation is the one most often done in the wrong direction. A nominal return of 4% against 3% inflation is not a real return of 1%, and the difference matters more the closer the two rates are.
The exact conversion is (1.04 ÷ 1.03) − 1 = 0.97%, not 1.00%. On $100,000 that subtlety is worth $121,317 after 20 years in today's money instead of the $180,611 the nominal figure would suggest, and the 0.03 percentage point gap between the approximation and the exact answer compounds into about $400 across two decades. The approximation is adequate for a rough reading and this page uses the exact form for everything it reports.
There is a reason investors are warned about this specifically. In a period when nominal rates are low relative to inflation, a return that looks positive can be negative in real terms, and the account balance will rise the whole time it is happening. This is the risk the Securities and Exchange Commission identifies as the principal concern for cash holdings — that inflation will outpace and erode investment returns over time. A cash balance earning 3% against 4% inflation is losing purchasing power at nearly 1% a year while every statement shows a larger number than the one before.
The same arithmetic applies in the other direction and is easy to miss: a plan that assumes 7% for thirty years and ignores inflation has assumed roughly 3.85% in real terms if inflation runs 3%, which is a materially more modest proposition. Setting a nominal return against an inflation rate is a two-minute check that changes the character of a long plan, and the compound interest calculator is the place to see the nominal projection in full.
Take $100,000, 20 years and 3% inflation. The price multiplier is 1.0320 = 1.8061, so the same basket of goods costs $100,000 × 1.8061 = $180,611, and the money is worth $100,000 ÷ 1.8061 = $55,368, which is a loss of 44.6% of its purchasing power.
The halving time uses the same rate: log 2 ÷ log 1.03 = 0.6931 ÷ 0.029559 = 23.45 years. Because doubling prices and halving purchasing power are one event, the same number answers both questions.
For the real return, grow the amount by the nominal rate and divide by the price multiplier: $100,000 × 1.0420 = $219,112, and $219,112 ÷ 1.8061 = $121,317 of today's money. The real annual rate is (1.04 ÷ 1.03) − 1 = 0.9709%.
A few cents of disagreement with your own working is the rounding order. More than that means one of the two implementations is wrong, and the corrections page explains how to report it.
This page will not decide that for you, but it can tell you what the choice is between. The Federal Reserve's longer-run objective is 2%, measured on the personal consumption expenditures index. Measured history on the CPI-U is approximately 3.15% a year from 1913 to 2025, though it has arrived in bursts rather than evenly — the 1970s averaged far more and the 2010s far less. The default of 3% sits between the policy target and the long-run measured average. Run the calculation at two rates and use the spread as your uncertainty rather than picking one number and believing it.
No, and the difference is worth knowing. A historical conversion takes two known index levels and returns the ratio, which is exact within the series. This page takes a rate you supply and projects forward, which is inherently a scenario. If you need to restate a 1995 salary in 2026 dollars, a historical CPI conversion is the right tool and this is not. If you need to know what today's $100,000 buys in twenty years under different assumptions, this is.
Because the correct conversion divides rather than subtracts. A nominal return of 4% and inflation of 3% means the purchasing power grows by a factor of 1.04 ÷ 1.03 = 1.0097, which is 0.97% a year. Subtracting gives 1%, which is close but always slightly wrong, and always in the optimistic direction when inflation is positive. Over 20 years the difference is small in percentage terms and a few hundred dollars in cash, but over a 40-year retirement projection the two methods diverge more than most people expect.
The arithmetic is the same and the direction is favourable. A fixed-rate mortgage payment is a nominal obligation, so inflation reduces what that payment costs in real terms every year. That is one reason a long fixed-rate loan is often described as a hedge against inflation, and it is also why the decision between terms is more subtle than an interest total suggests — the 15-year against 30-year comparison works through the arithmetic of that trade.
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Cluster us/investing · Unit us-investing-inflation-calculator · Engine inflation / buying-power · Method: Price inflation compounds the amount forward at the stated annual rate: what costs $100,000 today costs amount × (1 + i)^n in n years. Purchasing power compounds the same amount backwards, amount ÷ (1 + i)^n, so the two figures are reciprocals restated in different currencies. The real return is (1 + g) ÷ (1 + i) − 1, which is the exact conversion rather than the common approximation of subtracting the inflation rate from the nominal rate.