Inflation Calculator
Find out what a sum of money was worth in the past, or what it will be worth in the future accounting for inflation.
Inflation Calculator
Inflation is the rate at which prices rise over time, eroding purchasing power. Calculate how much a past amount is worth today, or how much you'll need in the future to match today's purchasing power. Supports both past-to-present and present-to-future modes.
What is the inflation calculation formula?
Future value = Present amount × (1 + inflation rate)^years. For example: $1,000 at 3% inflation over 10 years = $1,343.92. For past calculations, divide instead: Past amount ÷ (1 + rate)^years.
How does inflation affect savings?
If your savings earn 2% interest but inflation is 3%, your real return is −1%. Your money grows in nominal terms but loses purchasing power. This is why investing in inflation-beating assets (stocks, real estate) is important for long-term wealth preservation.
What is a normal inflation rate?
Most central banks target 2% annual inflation as healthy. Above 5% is considered high; above 10% is a crisis. The US hit 9% in 2022 (highest since 1981), and many countries saw similar spikes following the COVID-19 pandemic and energy shocks.
What is the difference between inflation and deflation?
Deflation is when prices fall over time. While it sounds beneficial, sustained deflation leads to delayed spending, falling corporate revenues, and economic contraction. Moderate inflation (~2%) encourages spending and investment, supporting healthy economic growth.
What inflation rate should I use?
The default is 3%, a reasonable long-term average for many developed countries. For more precision, use the actual CPI data for your country and time period. US long-term CPI average is ~3%; many other developed countries average 2–3%.
Which price index should I use for inflation calculations?
The Consumer Price Index (CPI) is the most common choice for general purchasing-power calculations. For specific categories such as healthcare or education, use the relevant sub-index for a more accurate result. Historical CPI data is published by national statistics agencies.
Can I use this to adjust pension or rent amounts for inflation?
Yes. Enter the current pension or rent amount and apply an expected annual inflation rate to estimate future values. For example, a $1,000 monthly pension at 2% annual inflation retains only about 67% of its real purchasing power after 20 years.
Can this tool simulate hyperinflation scenarios?
Enter a high inflation rate (e.g., 100%) to simulate hyperinflation. 100% annual inflation means purchasing power halves in a single year. This is useful for studying historical cases such as Argentina (211% in 2023) or Turkey (80% in 2022).