Calculate how inflation affects the purchasing power of money over time. See how much you need in the future to match today's buying power.
The amount of money you're starting with
Or enter number of years below
Bank of Canada targets 2% inflation annually
$15,924
in 2024 dollars
$6,280
$15,924
-$3,720
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power over time. When inflation is positive, each dollar buys fewer goods and services than before.
If you keep $10,000 in cash under your mattress for 20 years with 2% annual inflation, you'll still have $10,000, but it will only buy what $6,730 could buy when you started. This is why investing and growing your money is crucial to maintaining purchasing power.
The inflation adjustment formula is: Future Value = Present Value × (1 + inflation rate)^years
To calculate purchasing power loss: Purchasing Power = Present Value / (1 + inflation rate)^years
The Bank of Canada aims to keep inflation at the 2% midpoint of a 1% to 3% target range. Historical Canadian inflation has varied significantly:
This calculator provides estimates based on the inflation rate you enter. Actual inflation varies by year, region, and the specific goods and services you purchase. The Consumer Price Index (CPI) measures average price changes but may not reflect your personal cost of living.
Historical inflation rates can be found through Statistics Canada. Future inflation is unpredictable and this calculator should not be used as the sole basis for financial planning decisions.