Purchasing power calculator

Interest looks good on paper until inflation is taken off. The calculator shows what your amount is worth in today’s purchasing power after interest.

How this is calculated

What it calculates

What an invested amount is worth in today’s purchasing power after interest and inflation, and what the real interest rate is.

Your inputs

Invested amount: the sum you invest once.
Interest rate or return: the assumed yearly return, before taxes and costs.
Inflation rate: the assumed average price increase per year.
Investment period: how many years the money stays invested.

The calculation

Amount after years = amount × (1 + interest)^years
Purchasing power = amount after years ÷ (1 + inflation)^years
Real rate = (1 + interest) ÷ (1 + inflation) − 1

What the result means

The real rate shows how much your purchasing power actually grows. The rule of thumb “interest minus inflation” is only an approximation; the formula above is more exact.

Example

Default values: €10,000, 3 percent interest, 2 percent inflation, 10 years. Nominal €13,439, in today’s purchasing power €11,025. Real rate: 1.0 percent per year.

The account balance alone says little. What matters for what you can buy later is the amount after price increases.

The full explanation is in the lesson Inflation.

Source for the inflation target: ECB, monetary policy strategy statement 2025 ↗

Frequently asked questions

What is the real interest rate?

The interest rate after inflation. It shows how much your purchasing power really grows.

What does a negative real rate mean?

Your balance may rise, but prices rise faster. Later you can buy less with it than today.