Inflation math
Future cost ≈ today × (1 + rate)years. Buying power of a fixed sum ≈ today ÷ (1 + rate)years. $100 at 3% for 10 years costs about $134 later, and $100 saved with no interest buys about $74 of today's goods.
This is a classroom formula. Real inflation jumps around. It is not investment or tax advice.
Common questions
Is 3% the official rate?
No. It is a common planning default. Use the latest CPI if you need an official figure.
Does this include compounding?
Yes. Each year multiplies the last year's price.