Purchasing power calculator
What is an amount still worth in purchasing power after a number of years, and what would you need then to buy the same things? Choose an inflation rate and a number of years yourself.
A worked example
Suppose you choose 3% a year. Then €10,000 is still worth €7,441 in today’s money after 10 years: it has lost about 26% of its purchasing power. To buy then what €10,000 buys now, you would need €13,439. The rate is only an example you choose, not a forecast.
| After | Worth in today’s money | Needed for the same purchases |
|---|---|---|
| 5 years | €8,626 | €11,593 |
| 10 years | €7,441 | €13,439 |
| 20 years | €5,537 | €18,061 |
| 30 years | €4,120 | €24,273 |
How it calculates. If prices rise by the same percentage every year, the same amount buys less each year. The tool divides the amount by (1 + inflation) once for each year: worth today = amount ÷ (1 + inflation)years. The amount you would need is the same factor the other way round: amount × (1 + inflation)years.
How to read the result. The loss is not linear: at 3% a year, €10,000 loses €2,559 of purchasing power in the first 10 years and €1,904 in the next 10, because each year’s rise applies to a smaller real amount. The two figures answer different questions: what your money is still worth, and what you would need to keep up.
What it is not. No default rate is filled in on purpose: the result belongs to the rate you choose. Real inflation differs by year and by type of spending, and the tool says nothing about what savings or investments earn. To see an investment and inflation together, choose an inflation rate under Advanced in the ETF Calculator.
Where it comes from. Only the formula and your own input. The tool uses no external data and stores nothing.
How the calculation works
The tool multiplies the price level by (1 + inflation) once for every year. Take €10,000 at 3% a year for 10 years. The factor is 1.03 to the power 10, which is about 1.3439. Worth in today’s money = 10,000 ÷ 1.3439 = €7,441. Needed for the same purchases = 10,000 × 1.3439 = €13,439. The rate is always one you choose; the tool never fills one in for you.
Two situations with a rate you choose
Savings left untouched. Someone keeps €25,000 in a drawer account and wonders what it means in 15 years. If they choose 2% a year, the amount is still worth €18,575 in today’s money (about 26% less, a loss of €6,425), and €33,647 would be needed for the same purchases. After 30 years at the same chosen rate it is worth €13,802 (about 45% less), and €45,284 would be needed.
A monthly budget. Someone spends €1,500 a month and looks 20 years ahead. If they choose 4% a year, the factor is about 2.1911: the same purchases would cost €3,287 a month, and €1,500 in 20 years would buy what €685 buys today (a loss of about 54%). At a chosen 2% a year the same budget would need €2,229 a month. The gap between 2% and 4% shows how much the answer depends on the rate you pick, and nobody can know the rate in advance.
These are illustrations at rates you choose, not forecasts. Real price changes differ by year and by type of spending, and nothing here says what any saving or investment will return: returns can be negative and past performance guarantees nothing.
Common mistakes when reading the result
- Taking the inflation rate as known. It is a rate you choose; real inflation changes from year to year.
- Mixing up nominal and real amounts. The same number of euros buys less later, which is exactly what the tool shows.
- Using it for a single price. The tool applies one rate to everything, while prices of different goods move differently.
What the calculation leaves out
It applies one fixed rate to everything. Real prices do not move evenly: some costs rise faster than others, some fall, and your own spending mix differs from anyone else’s. It also ignores interest on savings, investment returns, transaction costs, tax and changes in your own income. The output answers only one narrow question: what a fixed rate does to an amount that stays the same.
Questions about purchasing power
Which inflation rate should I enter?
That is your own choice, and the tool does not suggest one. Try several, for example 1%, 2% and 4%, to see how wide the range of outcomes is. None of them is a forecast.
Why is the amount needed larger than the amount lost?
They answer different questions. The loss is measured against the amount you have: €10,000 at 3% for 10 years loses €2,559. The amount needed is measured against what you want to buy: €13,439 is €3,439 more than today, because it is the old amount multiplied by the same factor instead of divided by it.
Does this tell me what my savings or investments are worth?
No. The tool only shows the effect of the rate you enter on a fixed amount. What your savings or investments do over the same years is a separate question; to see an investment together with inflation, use the Advanced settings of the ETF Calculator.
Further reading: