What today's money is worth later
What an amount will buy after years of inflation, and what you would need then to match it. Two questions people ask separately that are the same calculation, seen from opposite ends.
Year by year
| 1 | $970.87 | $1,030.00 | $29.13 |
| 2 | $942.60 | $1,060.90 | $57.40 |
| 3 | $915.14 | $1,092.73 | $84.86 |
| 4 | $888.49 | $1,125.51 | $111.51 |
| 5 | $862.61 | $1,159.27 | $137.39 |
| 6 | $837.48 | $1,194.05 | $162.52 |
| 7 | $813.09 | $1,229.87 | $186.91 |
| 8 | $789.41 | $1,266.77 | $210.59 |
| 9 | $766.42 | $1,304.77 | $233.58 |
| 10 | $744.09 | $1,343.92 | $255.91 |
An estimate, not financial advice. Figures are illustrative and depend on assumptions listed below. Check anything you plan to act on with a qualified adviser or the provider itself.
The worked example below, drawn. One line is what the money buys as time passes; the other is what it would take to keep up.
How it works
What this works out
What an amount of money will actually buy later, and what you would need later to buy what it buys now. Two questions, one calculation, reported together on purpose.
The table underneath is the year-by-year path, so the shape of the curve is visible rather than just its endpoint.
The same fact from both ends
Prices rise by a compounding factor. Everything else follows from it:
after 20 years at 3%, prices = 1.03^20 = 1.8061
what 1,000 will buy = 1,000 / 1.8061 = 553.68
what you would need = 1,000 x 1.8061 = 1,806.11
Those two numbers are reciprocals of each other, and multiplying them gives the original amount squared — a property the tests assert at every rate and horizon, because it holds without needing a table of expected answers.
They are also the same sentence said two ways, and only one of them makes people act. “Money loses 45% of its value” is easy to nod at. “The same shopping costs 1,806” is not.
It compounds, which is why the numbers surprise
Twenty years at 3% is not 60%. Inflation compounds exactly as interest does, just against you:
| Years at 3% | What 1,000 buys | What you would need |
|---|---|---|
| 1 | 970.87 | 1,030.00 |
| 5 | 862.61 | 1,159.27 |
| 10 | 744.09 | 1,343.92 |
| 20 | 553.68 | 1,806.11 |
| 30 | 411.99 | 2,427.26 |
Every value
| Years from now | What 1,000 buys | What you would need |
|---|---|---|
| 1 | 970.87 | 1,030 |
| 2 | 942.6 | 1,060.9 |
| 3 | 915.14 | 1,092.73 |
| 4 | 888.49 | 1,125.51 |
| 5 | 862.61 | 1,159.27 |
| 6 | 837.48 | 1,194.05 |
| 7 | 813.09 | 1,229.87 |
| 8 | 789.41 | 1,266.77 |
| 9 | 766.42 | 1,304.77 |
| 10 | 744.09 | 1,343.92 |
| 11 | 722.42 | 1,384.23 |
| 12 | 701.38 | 1,425.76 |
| 13 | 680.95 | 1,468.53 |
| 14 | 661.12 | 1,512.59 |
| 15 | 641.86 | 1,557.97 |
| 16 | 623.17 | 1,604.71 |
| 17 | 605.02 | 1,652.85 |
| 18 | 587.39 | 1,702.43 |
| 19 | 570.29 | 1,753.51 |
| 20 | 553.68 | 1,806.11 |
| 21 | 537.55 | 1,860.29 |
| 22 | 521.89 | 1,916.1 |
| 23 | 506.69 | 1,973.59 |
| 24 | 491.93 | 2,032.79 |
| 25 | 477.61 | 2,093.78 |
| 26 | 463.69 | 2,156.59 |
| 27 | 450.19 | 2,221.29 |
| 28 | 437.08 | 2,287.93 |
| 29 | 424.35 | 2,356.57 |
| 30 | 411.99 | 2,427.26 |
| 31 | 399.99 | 2,500.08 |
| 32 | 388.34 | 2,575.08 |
| 33 | 377.03 | 2,652.34 |
| 34 | 366.04 | 2,731.91 |
| 35 | 355.38 | 2,813.86 |
| 36 | 345.03 | 2,898.28 |
| 37 | 334.98 | 2,985.23 |
| 38 | 325.23 | 3,074.78 |
| 39 | 315.75 | 3,167.03 |
| 40 | 306.56 | 3,262.04 |
Halving time is the figure worth remembering, and it is reported directly: at 3% money halves in value in 23.4 years, at 6% in 11.9, at 12% in 6.1.
The rule of 72 gets close — 72 divided by the rate — and it is an approximation tuned for the middle of its range. It says 24 years at 3% and 6 years at 12% against true values of 23.4 and 6.1. This tool computes the logarithm, because there is no reason to inherit somebody else’s approximation.
Real returns are a ratio, not a subtraction
The advanced field is what makes the page honest. With it at zero this models cash, which is the pessimistic case; real money is usually earning something.
The trap is how the two are combined:
8% return against 6% inflation
approximation: 8 - 6 = 2%
exact: (1.08 / 1.06) - 1 = 1.8868%
A tenth of a percentage point, which sounds like nothing. Over thirty years on 1,000 it is the difference between 1,811.36 and 1,752.01 — the approximation is 59 too generous, which is about a twentieth of the answer.
The subtraction is close at small numbers and drifts as either rate rises, which is the same shape as every other approximation on this site: fine where it does not matter and wrong where it does.
When the return beats inflation, the “lost to inflation” figure goes negative. That is deliberate rather than a bug — losing a negative amount is a real gain, and it keeps one output meaning one thing in both directions.
A worked example
1,000, twenty years, 3% inflation, held as cash:
| What it will buy | 553.68 |
| What you would need | 1,806.11 |
| Lost to inflation | 446.32 |
| Years to halve in value | 23.4 |
With a return. The same 1,000 over thirty years, earning 8% against 6% inflation, is worth 1,752.01 in today’s money — a real gain, and 59 less than the subtraction approximation would have promised.
These are the same figures asserted in this tool’s test file, so the page and the formula cannot drift apart without the build going red.
What it does not do
It uses one constant rate, and inflation is nothing like constant. It uses the rate you type rather than a published index, because there is no single correct one — a national figure is a basket weighted for an average household, and if rent and energy are a large share of your spending your experienced rate can run well above it for years. It does not model tax or charges on the return, both of which come straight off it. And it looks at an amount of money rather than a debt, where the effect runs the other way and benefits the borrower.
For what a return does on its own, compound interest is the tool; for what has to go in each month to hit a target, the savings goal calculator.
The formula
Prices rise by a compounding factor:
prices = (1 + inflation)^years
The two directions, from that one factor:
what it will buy = amount / prices
what you would need = amount x prices
With a return on the money, the first becomes:
nominal = amount x (1 + growth)^years
real = nominal / prices
which is the same as compounding at:
real rate = (1 + growth) / (1 + inflation) - 1
Not growth minus inflation. That approximation is
close at small numbers and wrong where it matters.
Years until money halves in value:
ln(2) / ln(1 + inflation)
What it assumes
- A single constant rate for the whole period. Real inflation is nothing like constant, and any individual decade can sit far away from a long-run average.
- The rate you type is the one that applies to you. A published index is a basket weighted for an average household, and nobody spends like the average — if rent and energy are a large share of your spending, your experienced rate can run above the headline for years.
- The return field is nominal and before tax and charges. Both come off it directly, and both are a real reduction in what the money buys.
- Real growth is computed as the ratio of the two factors rather than the difference of the two rates. The subtraction is the common approximation and it overstates the answer.
- The halving figure is the exact logarithm rather than the rule of 72, which is tuned for the middle of its range and drifts either side of it.
- The figures carry no currency symbol on purpose. The arithmetic is the same in pounds, euros or dollars, and the tool follows whichever currency your locale uses.
Common questions
What will my money be worth in 20 years?
At 3% a year, an amount held as cash buys about 55% of what it does today after twenty years — 1,000 becomes the equivalent of 553.68. Put the other way, you would need 1,806.11 in twenty years to buy what 1,000 buys now. Both figures come from the same 3% compounding, seen from opposite ends.
How long until inflation halves the value of money?
At 3%, 23.4 years. At 6%, 11.9. At 12%, 6.1. The rule of 72 — divide 72 by the rate — is a decent approximation and it is tuned for the middle of its range: it says 24 years at 3% against the true 23.4, and 6 years at 12% against 6.1. This tool reports the exact figure.
Is beating inflation just a matter of earning more than it?
Yes, but not by the margin the subtraction suggests. Real growth is the ratio of the two factors, not the difference of the two rates: 8% against 6% inflation is 1.8868% a year, not 2%. Over thirty years that gap is about a twentieth of the answer — 1,752.01 rather than the 1,811.36 the approximation gives.
What inflation rate should I assume?
It is a guess and should be treated as one. Many central banks target 2%, long-run realised averages in developed economies have often been closer to 3%, and any given decade can be well outside both. The useful approach is to run the figure you consider pessimistic alongside the one you expect, because over twenty years the gap between them is large.
Does inflation affect debt the same way?
It works the other way on a fixed-rate debt. The amount owed is fixed in nominal terms, so inflation erodes it in exactly the way it erodes savings — which is to the borrower's benefit. That is not modelled here; this tool looks at an amount of money rather than an obligation.
Sources
Method written and checked by Tessalor on Jul 31, 2026.