PakFinanceGuidesWhy prices matter
Inflation quietly reduces what your money can buy. This calculator shows both the future cost of something and the shrinking value of cash.
How it is calculated
Future cost = amount x (1 + inflation)^years. Purchasing power = amount / (1 + inflation)^years. The difference is the loss in value.
Example
At 3% inflation, something that costs $1,000 today would cost about $1,344 in ten years. Put another way, $1,000 held in cash would only buy what about $744 buys today.
What to do about it
Aim for savings and investments that beat inflation over time, review long-term goals regularly, and use realistic rates in your planning.
Context
Inflation differs by country and year. Use your own central bank's recent figures for a sensible estimate.
Frequently asked questions
What inflation rate should I use?
Many planners use 2% to 3% as a long-run assumption.
Does inflation affect savings accounts?
Yes. If interest is below inflation, your real return is negative.
Is inflation always bad?
Mild inflation is normal. High, unpredictable inflation is the problem.