Spreadsheet Practice

How to adjust a price for inflation in Excel

Formula (Excel and Google Sheets)

=B2*(1+B3)^B4

Grow the price by the inflation rate for each year: =B2*(1+B3)^B4 is what it will cost in B4 years.

Result on the example
$1,612.70 in B5
Works in
Every current version
Google Sheets
Same formula

See it work

The formula is already in B5. Change any input and the result updates, or edit the formula to experiment.

How it works

Inflation compounds: each year's rise applies to the previous year's higher price. Multiplying by 1.03 ten times turns $1,200 into $1,612.70. The same idea run backwards turns a future amount into today's money.

=B2*(1+B3)^B4

Result1612.699655

  1. B2$1,200

    The value in B2.

  2. B33.0%

    The value in B3.

  3. 1+B31.03

    The + operator adds.

  4. B410

    The value in B4.

  5. 1+B3)^B41.343916379

    The ^ operator raises to a power.

  6. B2*(1+B3)^B41612.699655

    The * operator multiplies.

In Google Sheets

The same formula works in Google Sheets: =B2*(1+B3)^B4. We ran it in Google Sheets mode on the same data and it returns $1,612.70.

Other ways to do it

Each one was run on the same example sheet.

FormulaResultWhen to use it
=FV(B3,B4,0,-B2)$1,612.70FV does the same compounding.
=B2/(1+B3)^B4$892.91Different resultDivide instead to see what $1,200 in ten years is worth in today's money. Today's value of $1,200 in ten years: $892.91.

Common mistakes

  • Multiplying by 1 + rate × years, B2*(1+B3*B4), ignores compounding and understates the price.
  • Use the inflation rate for what you're pricing: tuition and healthcare rise faster than the overall rate.

Try it yourself

Same data, empty answer cell. Your formula is graded instantly, then re-checked on changed data, so a typed-in number won't pass.

Adjust a price for inflation

In B5, calculate what something costing B2 today will cost in B4 years if prices rise by B3 a year.

Questions

How do I adjust a past price to today's money?

Use the price index: =old_price*CPI_now/CPI_then.

What is the real return after inflation?

=(1+return)/(1+inflation)-1, slightly less than return minus inflation.

Checked by running on 2026-10-30: every formula and result on this page was calculated by the Spreadsheet Practice formula engine, in both Excel and Google Sheets modes.