Calculation Ledger — Real Value Decline
How much will one million yen today be able to buy in ten years?
When to use When reading about expected pension amounts, savings amounts, or news of price hikes.
Nominal value is the amount written on paper; real value is how much it can buy today. If prices rise every year, the amount you can buy with the same nominal value decreases. There is one formula: divide the nominal value by (1 + annual inflation rate) to the power of the number of years.
Try with your own numbers
Change the values to recalculate instantly. The formula is provided below. For the source of the values, see the reference page.
Input value
Output value
Formula Today's Value = Nominal Value ÷ (1 + Inflation Rate)^Number of Years. Rate of Decline = 1 − 1 ÷ (1 + Inflation Rate)^Number of Years
In other countries
The definition of a price index is based on the same concept across countries. In Japan, it is published monthly by the Statistics Bureau of the Ministry of Internal Affairs and Communications, and in the U.S., by the Bureau of Labor Statistics.
Source (Archive)
- Consumer Price Index (CPI).Statistics Bureau, Ministry of Internal Affairs and Communications
- Consumer Price Index Frequently Asked QuestionsU.S. Bureau of Labor Statistics
Related Subjects and Practical Skills
P2 Calculation Ledger — Simple and Compound Interest
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