Inflation is the increase in prices over time, resulting in a decline in the value of money. You could have $100 in your pocket today, but in 10 years time that money may only buy $70 worth of goods and services. It's still $100, but in terms of the value of today's money, it only buys $70 worth of stuff 10 years later. It has lost buying power.
Use this calculator to see the damage inflation can cause to your savings over time. Enter a starting value and then choose an annual inflation rate. Because we're looking forward, we don't know what the rate will be, so make your best guess. The table below shows historic inflation rates from various starting years. Finally, enter the ending year. The calculator includes today up to the end of the year you enter.
|Average inflation rate since||Rate|
To see the effects of inflation in the past, use this great inflation calculator from the Bank of Canada.
See also What is inflation?