Currency Devaluation Calculator
Calculate the loss of purchasing power over time due to inflation. visualizes real value of savings.
About
Inflation systematically erodes the purchasing power of fiat currency. This process, often called devaluation in the context of purchasing power, means that a fixed amount of money buys fewer goods and services over time. For investors and savers, understanding "Real Value" versus "Nominal Value" is critical for long-term planning. A million dollars today will not hold the same utility in twenty years if the average inflation rate hovers around 3%. This tool applies the compound decay formula to estimate future purchasing power.
Formulas
The Future Value FV (in today's purchasing power) is calculated using the inflation rate r and time t.
This is effectively the reverse of compound interest.
Reference Data
| Annual Inflation | Value After 10 Years | Value After 20 Years | Half-Life of Money |
|---|---|---|---|
| 2% | 82.0% | 67.3% | 35 Years |
| 3% | 74.4% | 55.4% | 23 Years |
| 5% | 61.4% | 37.7% | 14 Years |
| 10% | 34.9% | 12.2% | 7 Years |