Inflation Calculator
See how inflation erodes purchasing power over time and calculate the future value of today's money.
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The inflation calculator shows how purchasing power erodes over time and how much more something will cost in the future. Enter an amount, an annual inflation rate, and a number of years — the calculator shows what that amount will need to become just to buy the same things it buys today. Inflation is the silent tax on savings. A $1,000 emergency fund that earns 0.5% in a traditional bank account loses real value every year when inflation runs above that. At 3.5% annual inflation, $1,000 today only buys what $709 buys in 10 years. Understanding this is the difference between saving money and building wealth. The US historical average inflation rate is approximately 3.1% per year since 1913, though it has varied widely — reaching 9.1% in June 2022 and averaging around 3.5% in the 2020s. The default rate of 3.5% is a reasonable estimate for planning purposes.
How to Use the Inflation Calculator
The Inflation Calculator is designed to give you an accurate answer in seconds. Follow these steps:
- 1Enter your original amount in the Original Amount field. The minimum value is 0. The default is $1000. Adjust this to match your specific situation.
- 2Enter your annual inflation rate (%) in the Annual Inflation Rate (%) field. The valid range is 0 to 100. The default is 3.5%. Adjust this to match your specific situation.
- 3Enter your years in the Years field. The valid range is 1 to 100. The default is 10. Adjust this to match your specific situation.
- 4Click Calculate to see your results instantly. The output updates as soon as you submit.
No account or sign-up required. All calculations run locally in your browser — nothing is stored or transmitted to any server.
Example Calculation
Here is what the Inflation Calculator produces with its default values. Change any input above to recalculate instantly for your own figures.
Inputs
- Original Amount$1000
- Annual Inflation Rate (%)3.5%
- Years10
Results
- Future Value (inflation-adjusted)$1410.60
- Purchasing Power Lost$291.08
How It Works
Future Value = Amount × (1 + Rate)^Years
Formula: Future Value = Amount × (1 + Rate)^Years This compound inflation formula works the same way as compound interest, but in reverse — instead of your money growing, the prices grow, meaning your money buys less. The purchasing power lost is the difference between the original amount and its inflation-adjusted equivalent. Example: $1,000 today at 3.5% inflation for 10 years. Future Value = $1,000 × (1.035)^10 = $1,410.60 Purchasing Power Lost = $1,000 − ($1,000 ÷ 1.4106) = $290.95 In other words: to buy what costs $1,000 today, you will need $1,410 in 10 years at 3.5% inflation. Alternatively, your $1,000 today will only buy what $709 worth of goods buys today, if you hold it as cash for 10 years. This is why financial advisers emphasise keeping long-term savings in assets that outpace inflation, not in cash accounts.
Frequently Asked Questions
What is the current inflation rate?
US inflation peaked at 9.1% in June 2022 and has moderated since. The Federal Reserve targets 2% annual inflation as a long-term goal. For financial planning purposes, many advisers use 3–3.5% as a conservative long-run assumption. Check the Bureau of Labor Statistics (BLS) website or Google "CPI rate" for the current official figure, and adjust the rate field in this calculator accordingly.
How does inflation affect savings?
Inflation reduces the real purchasing power of savings held in low-yield accounts. If your savings account earns 1% and inflation runs at 3.5%, your money loses approximately 2.5% in real terms each year. To preserve purchasing power, savings need to grow at or above the inflation rate. High-yield savings accounts, I-bonds, and diversified investment accounts are common strategies for beating inflation on savings.
What is the difference between nominal and real value?
Nominal value is the face value in currency — $1,000 is always $1,000 nominally. Real value adjusts for inflation — $1,000 today is worth more in real terms than $1,000 in 10 years because today's $1,000 buys more. When comparing wages, investment returns, or prices across time periods, always look at real (inflation-adjusted) figures to make meaningful comparisons.
How do I use the inflation calculator for salary comparison?
To compare a salary from a past year to today, enter the past salary as the amount, the historical average inflation rate for that period, and the number of years. The result shows what that historical salary is equivalent to in today's money. For example: a $40,000 salary in 2015 at 3% average inflation over 9 years is equivalent to approximately $52,200 in 2024 purchasing power.
Is the inflation calculator free?
Yes — free with no account needed. All calculations run in your browser and no data is stored. Adjust the inflation rate to model optimistic (2%) and pessimistic (5%) scenarios to understand the range of potential purchasing power outcomes for your savings plan.