TUNTON Private credit · Monterrey
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Tool

Inflation calculator

See how much purchasing power your money loses to inflation, and how much you'll need in the future to buy what you can buy today.

Editable example; the Banxico target is 3% ±1 point.
Future purchasing power
—
What that amount would buy, in today's pesos
Loss of purchasing power—
To buy the same, you'll need—
Prices multiply by—

Assumptions & method

  • Purchasing power = amount ÷ (1 + inflation)^years; future amount needed = amount × (1 + inflation)^years.
  • The rate is an editable assumption; the Banxico inflation target is 3% ±1 percentage point, but realized inflation varies year to year (check INEGI's INPC, Mexico's consumer price index).
  • Constant inflation every year: a reasonable simplification for planning, not a forecast.
  • Corollary: idle money loses value; any surplus should at least keep pace with inflation.
FAQ

The essentials, in brief

Why is the money I've put away worth less?
Because prices rise: at 4% annual inflation, in 10 years $100,000 MXN will buy what today costs about $67,500. Cash under the mattress carries a silent cost.
What is the real interest rate?
The return above inflation: if your investment pays 8% with 4% inflation, your real gain is around 3.8%. In fact, the ISR (income tax) individuals pay on interest is calculated on that real interest.
What inflation rate should I use to plan?
For long horizons, something between the Banxico target (3%) and the recent average is reasonable. Be pessimistic about critical expenses: medical and education inflation tends to run above the general rate.
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