Checked 15 October 2026. What was checked. How these pages are maintained.
Inflation math
Future cost ≈ today × (1 + rate)years. Buying power of a fixed sum ≈ today ÷ (1 + rate)years. $100 at 3% for 10 years costs about $134 later, and $100 saved with no interest buys about $74 of today's goods.
This is a classroom formula. Real inflation jumps around. It is not investment or tax advice.
Worked example
$100 today at 3% inflation for 10 years has the buying power of about $74 in today’s dollars, or you need about $134 then to match today’s $100.
Official CPI is a basket, not your grocery bill. Shelter and fuel can run hotter than the average. This page uses a constant rate you type, not a forecast of Bank of Canada policy.
The same basket later, and a fixed sum that buys less
$250 today at 2.5 percent inflation for 8 years costs about $304.60 if you want the same basket. The formula is 250 × (1.025)8. The other line is what happens if the $250 never grows: 250 ÷ (1.025)8 is about $205.19 of today’s buying power. Both numbers use a rate you typed. Neither one is a Statistics Canada CPI printout or a US Bureau of Labor Statistics release. Three percent is the placeholder in the box because it is a round planning figure, not because it is this year’s official rate.
Your rent, groceries, and fuel do not move with the all-items basket. A household that spends heavily on shelter can run hotter than 2.5 percent while the official average looks calm. Type a higher rate if you are stress-testing a long saving plan. Type a lower one if you are only curious. Say which you did when you quote the result.
Inflation is not an investment return
A savings account at 3 percent and inflation at 3 percent do not leave you richer in goods. They roughly cancel, before tax. This page does not subtract a return from inflation or the other way around. Project the savings on the compound interest calculator, project the basket here, and compare the two endings yourself. The rate is constant every year. Real inflation jumps. A constant rate is a sketch of a long period, not a year-by-year history.
Common questions
Is 3% the official rate?
No. It is a common planning default. Use the latest CPI if you need an official figure.
Does this include compounding?
Yes. Each year multiplies the last year's price.