How to use it
- Use the formula below with your own figures.
The formula
Adjusted = amount × (1 + inflation)ⁿ.
Worked example
$100 at 3% inflation needs about $134 in 10 years.
Frequently asked questions
Why adjust?
To compare money across years fairly.
Which rate?
Use a published CPI figure.
Tips
- Compare money across years in real terms.
- Hold assets that grow at or above inflation.
- Cash quietly loses value when prices rise.
Key terms
- CPI
- A price index for a basket of goods.
- Real return
- Return after inflation.
- Purchasing power
- What a sum can actually buy.