Inflation Calculator

See how inflation erodes purchasing power

Amount

From year

To year

Average annual inflation rate

Fill in the fields above

Enflasyon Hesabı Hakkında

This calculator translates nominal returns into real returns and computes purchasing-power equivalence across years using inflation data. The core operation is the Fisher relationship: real return = (1 + nominal) / (1 + inflation) − 1. The naive subtraction (nominal − inflation) approximates this at low rates but increasingly diverges as both inputs rise.

For high-inflation economies, this distinction is not academic. A 45% nominal return when inflation is 50% is a 3.3% real loss, not a 5% real loss as subtraction suggests. The error magnitude grows with the size of both inputs and is exactly the size that turns winning investments into losing ones in real terms.

The calculator also performs purchasing-power conversion: "100 TL in 2020 equals how much TL in 2026?" Useful for comparing salaries, prices, and budgets across years. The result depends on which inflation series you use — headline CPI is the default; specific categories (rent, education, healthcare) can diverge materially.

Enflasyonun gizlendiği yerler

The deposit illusion. A TL deposit paying 42% annually when inflation is 50% loses 5.3% in real terms. The bank statement number went up; your purchasing power went down. Headline rates are misleading without an inflation reference.

Salary value over time. A 50,000 TL salary in 2022 has the same purchasing power as roughly 130,000–160,000 TL in 2026, depending on the inflation series used. A salary that hasn't risen at this rate has effectively been cut by inflation.

Cross-asset comparison. A 15% return in USD when USD inflation is 3% (real 11.7%) outperforms a 50% TL return when TL inflation is 45% (real 3.4%) — even though the headline TL number is larger. Real returns are what compare across currencies.

Yaygın enflasyon hataları

Subtracting instead of dividing. Real ≠ nominal − inflation at high rates. Use (1 + n) / (1 + i) − 1.

Using headline CPI for everything. CPI averages across categories. If your spending is rent-heavy or education-heavy, your personal inflation rate may be much higher than headline.

Ignoring currency. A foreign-currency return needs to be assessed in the currency you'll spend in. USD returns matter for someone planning USD expenses; TL returns matter for TL expenses.

Comparing nominal to nominal across long periods. Always restate to real before comparing values across years.

Sık sorulan sorular

What's the difference between real and nominal return?

Nominal is the headline percentage change. Real adjusts for inflation: real = (1 + nominal) / (1 + inflation) − 1. Real measures purchasing power; nominal measures statement balances.

Which inflation rate should I use?

Headline CPI (TÜFE in Türkiye, published monthly by TÜİK) is the standard reference. For specific spending patterns — high rent, frequent travel, education-heavy budgets — sub-indices may better reflect your situation.

Why don't simple subtraction and the proper formula agree at high rates?

The proper formula accounts for the compounding interaction between nominal returns and inflation. At small rates the linear approximation is fine; at large rates the curve matters and subtraction overestimates real returns.

Can real returns be negative even with positive nominal returns?

Yes — this is the most important case. Whenever inflation exceeds nominal return, real return is negative. In high-inflation periods this is common even with double-digit nominal rates.

How do I compare an asset across years?

Compute the real return for each year and compound them: (1 + r1)(1 + r2)(1 + r3) − 1 gives the cumulative real return. This is the honest multi-year picture.

Inflation Calculator

About the Inflation Calculator

Enflasyon Hesabı Hakkında

Where inflation hides

Enflasyonun gizlendiği yerler

Common inflation mistakes

Yaygın enflasyon hataları

Frequently asked questions

Sık sorulan sorular