# How to adjust a price for inflation in Excel

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

**Excel:** `=B2*(1+B3)^B4` (Every current version)

**Google Sheets:** the same formula works.

## Example

Sample data (row 1 is the header):

| A | B |
| --- | --- |
| Item | Value |
| Cost today | 1200 |
| Annual inflation | 0.03 |
| Years | 10 |
| Future cost |  |

Formula in B5: `=B2*(1+B3)^B4`

Result: $1,612.70

## 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.

## Other ways

- `=FV(B3,B4,0,-B2)`: FV does the same compounding.
- `=B2/(1+B3)^B4`: Divide 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.

## 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.

Every formula and result on this page was checked by running it in the Spreadsheet Practice formula engine on 2026-10-30.

Source: https://spreadsheetpractice.com/formulas/adjust-a-price-for-inflation