HaatBeatHow it's calculated
Future cost = C × (1 + i)^t
Buying power = C ÷ (1 + i)^t
C is the amount today, i is the yearly inflation rate as a decimal and t is the number of years.
Assumptions
- One average rate for every year. Real inflation changes year to year.
- The rate applies evenly to everything the amount buys.
Worked example
At 6% a year, something that costs 100 today would cost about 201 in 12 years: prices roughly double.
Questions
Which inflation rate should I use?
Official consumer price figures for your country are a starting point. Costs such as education or healthcare often rise faster, so try a higher rate for those.
What is the rule of 72?
Dividing 72 by the rate gives roughly the years for prices to double. At 6%, that is about 12 years.
Does this use official data?
No. You enter the rate. Dated official figures per country may be added later.