Convert money across years and see how inflation erodes purchasing power.
Inflation raises prices over time. Something costing your amount today will cost 'future cost' later, and the same money will only buy what 'future value' represents in today's terms.
Future cost
Future Cost = Amount × (1 + r)ⁿ
Purchasing power
Purchasing Power = Amount ÷ (1 + r)ⁿ
Estimates only; actual inflation varies year to year and is not predictable.
Long-run inflation in developed economies has averaged around 2–3% per year, though it varies significantly by period and country.
As prices rise, each dollar buys fewer goods. Holding cash that doesn't earn at least the inflation rate steadily reduces your real wealth.