Free Inflation Calculator — Future Value of Money
November 2, 2026 · 3 min read · By the DollarWise team
How it works
Inflation erodes what your money can buy: the same rupees buy less every year. Enter a current amount, the annual inflation rate you expect and the number of years — this calculator shows the future equivalent cost, how much purchasing power declines, and optionally compares a nominal investment return against the real, inflation-adjusted result.
## How the math works
Inflation compounds just like interest, but it shrinks purchasing power instead of growing money. With current amount A, annual inflation rate i and years t, the factor by which prices rise is (1 + i)^t:
**Future cost = A × (1 + i)^t**
**Purchasing power then (in today's money) = A ÷ (1 + i)^t**
The percentage decline in purchasing power is 1 − 1 ÷ (1 + i)^t. If you enter a nominal investment return, the real (inflation-adjusted) return is (1 + nominal) ÷ (1 + inflation) − 1, and the real future value is A × (1 + real return)^t.
## Everyday uses
- **Retirement planning:** find out how much you actually need in future rupees to match today's standard of living.
- **Goal saving:** see the real future cost of a house, car or education so you save enough, not just today's price.
- **Investment screening:** check whether a "high-return" product actually beats inflation — anything below the inflation rate loses money in real terms.
## Frequently asked questions
### What inflation rate should I use for Pakistan?
Pakistan's recent inflation has been volatile, often in the high teens to mid-twenties, while long-run global averages are much lower. For long-term planning, test a range — a moderate 6–8% alongside a stressful 15–20% — rather than relying on one number.
### If my savings account pays 12% and inflation is 18%, am I gaining?
No — you are losing in real terms. Your nominal balance grows, but prices rise faster, so the money buys less over time. Your real return is roughly (1.12 ÷ 1.18) − 1 ≈ −5.1% per year. To grow wealth, your return must exceed inflation.
### Does this calculator work for other currencies?
Yes. The math is currency-neutral — enter any currency and the results come out in that currency. The labels say Rs. because this page is PKR-focused, but the formula is identical for dollars, pounds or any other currency.