How inflation calculator works
Inflation is the rate at which the general level of prices rises, so each unit of currency buys less over time. A constant annual inflation rate compounds the same way interest does: after t years an amount A grows to A × (1 + r)^t in nominal terms. Equivalently, the real purchasing power of a fixed sum falls by the inverse factor each year.
This calculator takes an amount, an annual inflation rate, and a number of years, and reports three things: the future value (what your money would need to grow to in nominal terms just to keep pace), the purchasing power (what today's amount will actually be worth in today's dollars after inflation), and the inflation factor. An optional discount/return rate also produces a "real value" that accounts for a competing return.
Enter the amount, the annual inflation rate as a percentage, and the years. The result assumes a constant rate — real inflation varies year to year. Use it for rough long-horizon planning, like estimating how much retirement income will be worth decades from now or comparing salaries across years.