Inflation and purchasing power simulator
Measure the effect of an average annual inflation rate on the purchasing power of a sum, and the amount needed to preserve it over time.
Your settings
Results update with each entry.
Assumption you choose, held constant. Actual inflation varies from year to year.
- Purchasing power of €1,000 over 10 years
- €820
- In today's euros, assuming annual inflation of 2.0%.
- Amount needed to maintain purchasing power
- €1,219
- Cumulative price increase
- 21.9%
- Loss of purchasing power
- 18.0%
Change over time
For the amount entered, year by year.
- Purchasing power of the sum
- Equivalent amount needed
Breakdown by year
| Year | Purchasing power of the sum | Equivalent amount needed |
|---|---|---|
| Today | €1,000 | €1,000 |
| 1 | €980 | €1,020 |
| 2 | €961 | €1,040 |
| 3 | €942 | €1,061 |
| 4 | €924 | €1,082 |
| 5 | €906 | €1,104 |
| 6 | €888 | €1,126 |
| 7 | €871 | €1,149 |
| 8 | €853 | €1,172 |
| 9 | €837 | €1,195 |
How this calculation is made
The inflation rate is an assumption you enter: it is neither measured nor forecast by TimeLinq. It is assumed to be the same every year. For an amount A, an inflation rate π and a duration of n years:
Future purchasing power = A / (1 + π)^n
Required amount = A × (1 + π)^n
Future purchasing power shows what the sum will buy in n years, expressed in today's euros. The required amount is the sum that must be held in n years to buy what A buys today.
- Cumulative price increase: (1 + π)^n − 1.
- Loss of purchasing power: 1 − 1 / (1 + π)^n.
- Measured inflation (for example by Insee for France) varies from year to year and differs according to each household's spending.
The results are simulations based on the stated assumptions. They do not predict future results and do not take your personal situation into account. The information published on TimeLinq is for informational purposes only and does not constitute investment advice. Investing involves a risk of capital loss.