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Future value = Present value × (1 + r)ⁿ
Present value = Future value ÷ (1 + r)ⁿ
where r = annual inflation rate as a decimal (e.g. 0.03 for 3%), n = number of years.
The Rule of 70: years to halve purchasing power ≈ 70 ÷ inflation rate. At 2% inflation, purchasing power halves in ~35 years. At 7%, it halves in ~10 years.
Worked example: A salary of 50,000 today at 3% average inflation for 20 years. Future equivalent: 50,000 × 1.03²⁰ = 50,000 × 1.806 = 90,306. Your salary would need to be 90,306 in 20 years just to have the same purchasing power as 50,000 today.