Purchasing Power Calculator

Purchasing power is the quantity of goods and services a given amount of money can buy. Over time, as prices rise due to inflation, the same nominal amount buys less and less — it loses purchasing power. The calculator shows how much today money will really be worth in a set number of years at a given inflation rate.

Real value is computed as real = amount / (1 + inflation)^years, where inflation is the annual rate as a fraction (e.g. 4% = 0.04). We divide today amount by the cumulative price-growth factor. The result tells you how many of today money units the future amount corresponds to in real purchasing power.

Loss of value is the difference between today amount and its real value in the future (amount - real value). It shows how much purchasing power inflation erodes in money terms. The higher the inflation and the longer the period, the larger the loss — idle money loses value even with no spending at all.

The amount needed is the sum you would have to hold in X years to preserve today purchasing power: amount * (1 + inflation)^years. In other words, how much future money buys the same as today amount buys today. It mirrors the real value — the target your capital must reach to keep up with inflation.

The loss percentage is the share of lost purchasing power in the original amount (loss / amount * 100%). For example, 30% means the future real value is only 70% of today value. This percentage depends solely on the inflation rate and the number of years, not on the size of the amount — it is the same for 1,000 and for a million.

The most common choice is the central bank long-term inflation target — in Poland the NBP aims for 2.5% (±1 percentage point). In periods of elevated inflation a higher figure, such as 4-6%, may be reasonable. It is worth running several scenarios, because future inflation is unknown.

Inflation compounds geometrically — each year prices rise from the already higher level of the previous year. That is why even a moderate rate, such as 4% per year, cuts purchasing power by more than half after 20 years. It is the same compounding mechanics, only working against the holder of cash.

To preserve real value, savings must earn at least the rate of inflation. Helpful options include deposits paying above inflation, inflation-linked bonds, funds, equities and real estate. Holding large amounts purely in non-interest-bearing cash almost guarantees a real loss over time.

No. The calculator shows only the effect of inflation itself on the real value of an amount, assuming the money is neither invested nor earning interest. To judge a real investment return, subtract inflation from the nominal return and also account for capital gains tax.

No. The result is a projection based on the constant inflation rate you enter yourself. Actual inflation changes from year to year and may deviate from the assumption. The calculator is informational and educational — it helps you understand how purchasing power erodes, not to forecast specific future prices.