Inflation Calculator
Use this inflation calculator to see how the value of money changes over time. Enter a starting amount and compare purchasing power across different years to understand the effects of inflation.
Inflation Details
Impact of Inflation
Enter amount and inflation rate to see impact.
What Is Inflation?
Inflation is the rate at which the general price level of goods and services rises over time, which correspondingly reduces the purchasing power of money. If inflation runs at 3% per year, something that costs $100 today will cost approximately $103 next year. Over a decade, that same item could cost around $134.
In the United States, inflation is most commonly measured by the Consumer Price Index (CPI), which tracks the average change in prices paid by urban consumers for a representative basket of goods and services including food, housing, transportation, medical care, and apparel. The Federal Reserve targets an average inflation rate of around 2% per year.
Why Inflation Matters for Your Finances
If your savings account earns 1% interest while inflation runs at 3%, you're effectively losing 2% of purchasing power each year. This is why investing — in stocks, real estate, or inflation-protected securities — is important for preserving and growing wealth over long time horizons. Even moderate inflation compounds significantly over decades.
How to Use This Calculator
- Enter the original amount you want to adjust for inflation.
- Enter the annual inflation rate (the US historical average is roughly 3%).
- Enter the number of years over which inflation applies.
- Click Calculate to see the future equivalent value and the purchasing power lost.
Frequently Asked Questions
What has the average US inflation rate been historically?
Since 1913 (when the Federal Reserve was established), the average US inflation rate has been approximately 3.1% per year. The rate has varied widely — from deflation during the Great Depression, to double-digit inflation in the late 1970s and early 1980s, to the elevated rates seen in 2021–2023 following pandemic-related supply disruptions.
How can I protect my savings from inflation?
Common inflation hedges include: investing in equities (which have historically outpaced inflation over long periods), Treasury Inflation-Protected Securities (TIPS), I-bonds, real estate, and commodities like gold. Keeping large sums in low-yield cash accounts is the most vulnerable position during inflationary periods.
What is the "Rule of 70" for inflation?
The Rule of 70 is a quick mental math trick: divide 70 by the annual inflation rate to estimate how many years it will take for prices to double. At 3% inflation, prices double in about 70 / 3 ≈ 23 years. At 7%, they double in about 10 years.