How to Calculate Inflation
Hesaplayıcı3 min read
Short answer
The effect of inflation on an amount is the amount times (1 + inflation rate) for every year: prices grow with compounding. Purchasing power divides by the same factor. For example, at 30% inflation a year for five years, a basket costing 10,000 TRY today costs 37,129.30 TRY, and 10,000 TRY then buys what 2,693.29 TRY buys today.
Formula
F = A × (1 + r)^t
P = A / (1 + r)^t
- F: future cost, the price after t years of what costs A today
- P: purchasing power, what A buys after t years, in today’s prices
- A: the amount today
- r: the annual inflation rate as a decimal (0.30 for 30%)
- t: the number of years; fractions are allowed
Total inflation is ((1 + r)^t − 1) × 100.
Step-by-step example
A basket that costs 10,000 TRY today, 30% inflation every year, 5 years:
- Write the price growth factor: (1 + 0.30)^5.
- Future cost: F = 10,000 × (1 + 0.30)^5 = 37,129.30 TRY.
- Purchasing power: P = 10,000 / (1 + 0.30)^5 = 2,693.29 TRY.
- Total inflation: prices rise 271.29% in five years.
After five years you need 37,129.30 TRY to buy today’s basket. The 10,000 TRY you hold today will then buy what 2,693.29 TRY buys today.
Effect by period and by rate
10,000 TRY, 30% inflation a year:
| Period | Future cost | Purchasing power | Total inflation |
|---|---|---|---|
| 1 year | 13,000.00 TRY | 7,692.31 TRY | 30.00% |
| 2 years | 16,900.00 TRY | 5,917.16 TRY | 69.00% |
| 3 years | 21,970.00 TRY | 4,551.66 TRY | 119.70% |
| 5 years | 37,129.30 TRY | 2,693.29 TRY | 271.29% |
| 10 years | 137,858.49 TRY | 725.38 TRY | 1,278.58% |
10,000 TRY, 5 years, different rates:
| Annual inflation | Future cost | Purchasing power | Total inflation |
|---|---|---|---|
| 10% | 16,105.10 TRY | 6,209.21 TRY | 61.05% |
| 20% | 24,883.20 TRY | 4,018.78 TRY | 148.83% |
| 30% | 37,129.30 TRY | 2,693.29 TRY | 271.29% |
| 45% | 64,097.34 TRY | 1,560.13 TRY | 540.97% |
Common mistake: adding up the yearly rates
Five years of 30% inflation is not 150%. Each year’s increase is added to the price that already rose the year before. Adding up the rates assumes growth like simple interest: 10,000 TRY becomes 25,000 TRY in five years that way. The correct, compound calculation gives 37,129.30 TRY.
Past inflation and TÜİK data
The inflation calculator assumes the same rate every year and does not use TÜİK data. For the real inflation of a past period, look at TÜİK’s consumer price index (CPI, TÜFE). According to TÜİK, the annual CPI change in August 2026 was 31.51%. Rent increases in Türkiye use the CPI 12-month average change instead, which was 31.79% for August 2026.
Worked example: 1,000 at 10% inflation a year for 5 years
Future cost
1,610.51
- Purchasing power
- 620.92
- Total inflation
- 61.05%
Step by step
Future cost
F = A × (1 + r)^t
F = 1,000 × (1 + 10%)^5 = 1,610.51
Purchasing power
P = A / (1 + r)^t
P = 1,000 / (1 + 10%)^5 = 620.92