General · Economics
Inflation calculator.
See how much purchasing power has been lost over time, and what an amount needs to be to keep pace with inflation.
Inputs
Purchasing power
Fill the form and press Calculate.
Worked example: $1,000 in 2000 at 2.5% a year
If prices rose an average of 2.5% a year from 2000 to 2026 (26 years), what cost $1,000 in 2000 would cost 1,000 × 1.02526 = $1,900.29 in 2026, a total price rise of 90.0%. Said the other way, $1,000 today would buy what $526.23 bought in 2000.
| Average inflation | Cost in 2026 of $1,000-worth in 2000 | Total price rise | Buying power of $1,000 in start-year dollars |
|---|---|---|---|
| 2.0% | $1,673.42 | 67.3% | $597.58 |
| 2.5% (default) | $1,900.29 | 90.0% | $526.23 |
| 3.0% | $2,156.59 | 115.7% | $463.69 |
- Small rate differences compound. Across 26 years the gap between 2% and 3% a year is $483 on a $1,000 basket.
- This is an assumed average, not history. The calculator applies one constant rate every year; real inflation varied from year to year, so use the Bank of Canada’s inflation calculator for actual CPI over a specific period.
Next steps: see how your savings could grow with the compound interest calculator, check whether your retirement plan keeps pace with the retirement calculator, or plan a target with the savings goal calculator.
How this is calculated
- Factor = (1 + average annual inflation)years, where years = end year − start year.
- Equivalent amount = starting amount × factor. Buying power of the starting amount = starting amount ÷ factor. Total inflation = (factor − 1) × 100.
The calculator takes the rate you enter and does not look up actual prices. The Bank of Canada’s own inflation calculator uses monthly Consumer Price Index data from 1914 to the present to show changes in the cost of a fixed basket of consumer purchases, and Statistics Canada publishes the CPI itself. The Bank aims to hold inflation at the 2 per cent midpoint of a 1 to 3 per cent target range (Bank of Canada, Inflation). All three pages were checked 1 October 2026.
An illustration of compounding, not a forecast. Past or assumed inflation does not predict future prices.
Frequently asked questions
How do I calculate the effect of inflation?
Multiply the starting amount by (1 + average annual inflation) raised to the number of years. At 2.5% for 26 years the factor is 1.9003, so $1,000 becomes $1,900.29.
What inflation rate should I use?
The Bank of Canada targets 2 per cent, the midpoint of a 1 to 3 per cent range, so 2% is a common planning assumption, but actual inflation in any year can be outside that range. Try 2%, 2.5% and 3% as the table above does.
Does this use real Canadian CPI data?
No. It applies the single average rate you enter, so it will not match history year by year. The Bank of Canada’s inflation calculator uses monthly CPI data back to 1914 for actual comparisons.
What does “current buying power” mean?
It is the starting amount divided by the inflation factor: how much of the starting year’s purchasing power the same dollars retain. With 90% total inflation, $1,000 retains the buying power of $526.23.
Why does inflation matter for savings and retirement?
Because a fixed sum buys less each year. A projection in nominal dollars overstates what you can afford later; deflate it by the factor above, or use a return net of inflation.