5 min · 2026-10-12
How much does pay have to rise just to stand still?
The compound-interest formula behind the inflation sandbox, what it tells you, and the three things it cannot tell you.
A pay rise below inflation is a pay cut. That is the whole idea, and the arithmetic is the same compound-interest formula used for everything else.
futurePrice = currentPrice × (1 + i)^n payToKeepUp = currentPay × (1 + i)^n n is in years. To work in days: n = days ÷ 365 (itself an assumption)
What the multiplier looks like
| Rate | After 5 years | After 10 years | After 20 years |
|---|---|---|---|
| 2% | ×1.10 | ×1.22 | ×1.49 |
| 3% | ×1.16 | ×1.34 | ×1.81 |
| 5% | ×1.28 | ×1.63 | ×2.65 |
Multiplier applied to prices and to pay at various assumed annual rates
At 3% a year, pay has to be about a third higher in ten years to buy exactly what it buys today. Standing still is not free.
What this is not
- Not a forecast. You supply the rate; the tool has no opinion about it.
- Not an official statistic, and not connected to any live price index.
- Not a historical series. No past prices are drawn anywhere, because none were collected.
What it leaves out of your side
The pay figure assumes only the rate you entered. It does not account for promotions, changing jobs, or the ordinary progression that most careers have, all of which usually matter more than the rate does.
More guides
Why yearly pay does not divide neatly into months
Yearly ÷ 12 and the number in your account are different. Here is every reason why.
How earnings per second are calculated
The formula behind the counter, and why its figures always agree with each other.
Working hours or round the clock: which basis to use
Same salary, a per-second figure six times larger. Here is where the factor comes from.
This piece explains how the calculations work. It does not promise any financial return and is not investment advice.