How to use Inflation Calculator
This inflation calculator shows how the purchasing power of money changes over time. See what a past amount is worth in today’s dollars, what a future amount will buy at an assumed inflation rate, or the equivalent salary you would need to keep pace with rising prices. It makes the slow erosion of cash — and why investments must outpace inflation — concrete.
- Enter an amount of money.
- Set the start year (or "today") and the end year.
- Provide the average annual inflation rate, or use historical data.
- Review the equivalent value and total change in purchasing power.
- Compare across different time horizons.
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How inflation erodes purchasing power
Inflation compounds like interest in reverse: at 3% a year, prices roughly double every ~24 years, so the same cash buys far less over time. Future value = amount × (1 + rate)^years for prices, and today’s equivalent of a past amount divides by that factor. This is why money left in low-yield cash steadily loses real value.
| Years | Equivalent buying power |
|---|---|
| 10 years | ~$744 |
| 20 years | ~$554 |
| 30 years | ~$412 |
Real returns and beating inflation
Your "real" return is the nominal return minus inflation. An investment earning 6% during 3% inflation has a ~3% real return. To preserve and grow wealth, savings need to earn at least the inflation rate; this is the core argument for investing rather than holding excess cash long-term.
Worked examples
Past to present
Inputs: $1,000 in 2000 · ~2.5% avg
Result: ~$1,780 in today’s money
Future erosion
Inputs: $50,000 · 3% · 20 yr
Result: ~$27,700 buying power
Glossary
- Inflation rate
- The annual percentage increase in the general price level.
- Purchasing power
- How much a given amount of money can actually buy.
- Real value
- A monetary amount adjusted for inflation.
- CPI
- Consumer Price Index — a common measure of inflation based on a basket of goods.
Related reading
Frequently Asked Questions
Why use Inflation Calculator?
- Converts past amounts to today's equivalent purchasing power using historical rate data
- Projects how a fixed cash balance loses real value at a given annual inflation rate
- Shows the salary increase required to maintain purchasing power after a period of inflation
- Accepts a custom rate or uses a default historical CPI average for the time range
Common use cases
- Find what a $60,000 salary from a decade ago is worth in today's dollars
- Estimate how much a fixed pension payment will actually buy in 20 years at 3% inflation
- Check whether a recent raise actually kept pace with cumulative inflation since the last review
- Project how much a $50,000 annual retirement budget will cost in future dollars in 25 years
- Compare a 4% inflation scenario against a 2% assumption to test a long-term financial plan
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