Inflation Calculator
Inflation quietly erodes what money can buy. Project what a sum will cost in the future, convert a past amount into today's money, or solve the average inflation rate between two amounts. Each mode shows the purchasing power gained or lost and works through the math step by step.
Formula
Worked example
$1,000 at 3% inflation for 20 years: 1,000 x 1.03^20 is about $1,806 to buy the same goods. Today's $1,000 will then buy about $554 worth, a 45% loss of purchasing power. To solve a rate: $100 growing to $180 over 20 years implies (1.8)^(1/20) - 1, about 2.97% a year.
Three ways to measure inflation
This calculator runs in three modes. Forward projects an amount into the future at an average inflation rate, showing both the future cost of today's goods and how much real buying power today's money will keep. Backward takes an amount from the past and grows it by inflation to show its equivalent in today's money. Rate is a reverse solve: enter what something cost then and now, plus the number of years between, and it returns the average yearly inflation that connects the two, the compound annual growth rate of prices. All three use the same compounding relationship, amount times (1 plus rate) to the power of years.
Future cost versus future buying power
In forward mode the future cost is what today's basket of goods will cost after years of rising prices, found by multiplying by the compounding factor. The future buying power is the mirror image: how much today's fixed amount will actually be worth in real terms, found by dividing by the same factor. The gap between the starting amount and that shrunken buying power is the purchasing power lost to inflation, shown in the donut. At 3% inflation, prices roughly double in about 24 years, so cash left untouched halves in real value over that time.
Why cash loses value and what beats it
Money sitting in a non interest account keeps the same face value but loses purchasing power year after year. This is the core reason savers invest: to earn a return that at least keeps pace with, and ideally beats, inflation. A real return is what is left after subtracting inflation from a nominal return. An investment earning 6% while inflation runs at 3% delivers roughly a 3% real return, the part that actually grows your purchasing power. When planning long term, comparing returns against inflation is far more meaningful than the headline percentage alone.
Flat rate versus official CPI data
This tool uses a single flat average rate, which is ideal for planning and for what if projections. For an exact historical comparison between two specific years, an official Consumer Price Index series is more accurate because real inflation varies year to year: it was near 0.1% in 2015 and around 8.0% in 2022. The rate mode helps bridge the two, letting you back out the average rate implied by official figures and then reuse it in a forward projection.
Recent U.S. average annual inflation rates
| Year | Average inflation rate |
|---|---|
| 2015 | 0.1% |
| 2018 | 2.4% |
| 2020 | 1.2% |
| 2021 | 4.7% |
| 2022 | 8.0% |
| 2023 | 4.1% |
| 2024 | 2.9% |
Average annual change in the Consumer Price Index. Real inflation varies year to year; the long run average since 1913 is roughly 3%.
Frequently asked questions
What inflation rate should I use?
Central banks in many developed economies target around 2%, and long run averages are often in the 2 to 4% range, with the U.S. averaging roughly 3% since 1913. Use your region's recent average or your own expectation. For an exact past comparison, use the rate mode with official CPI figures.
How do I find the average inflation rate between two amounts?
Switch to rate mode, enter the start amount, the end amount and the number of years between them. The calculator takes the ratio of the two amounts, raises it to the power of one over the years, and subtracts one. That is the compound annual growth rate of prices, the single steady rate that links the two figures.
What is the rule of 72 for inflation?
Divide 72 by the inflation rate to estimate how many years until prices double. At 3% that is about 24 years; at 6% about 12 years. This calculator also shows the exact doubling time using natural logarithms, which the rule of 72 approximates.
How is this different from a savings calculator?
A savings calculator grows money with interest; an inflation calculator shrinks its purchasing power with rising prices, or in backward mode restates an old amount in today's money. Comparing the two shows whether your savings are actually gaining ground in real terms.