Inflation Calculator
Calculate the impact of inflation on purchasing power with live CPI data from official government sources.
Inflation Calculation
Calculation Type
Value & Inflation
Current value or amount
Expected annual inflation rate
Number of years
Custom Inflation Rates
Salary Adjustment
Inflation Analysis
Future Value
After 10 years
Total Inflation
Dollar increase
Purchasing Power Loss
Reduction in buying power
Inflation Multiplier
Price increase factor
Avg. Annual Increase
Compounded annually
Inflation Impact Summary
Inflation Rate Context
Inflation Protection Tips
- • Invest in assets that typically outpace inflation (stocks, real estate)
- • Consider Treasury Inflation-Protected Securities (TIPS)
- • Maintain some debt with fixed interest rates
- • Diversify internationally to hedge against domestic inflation
- • Budget for annual price increases in essential goods and services
CPI data from official government sources
How it works
Inflation erodes the purchasing power of money over time: the same dollar buys less each year. This calculator compounds an inflation rate across a span of years to show what a sum needs to grow to in order to keep pace — or, equivalently, what an old amount is worth in today's money.
Purchasing power over time
Future cost = Present amount · (1 + i)ⁿ
- i
- average annual inflation rate (decimal)
- n
- number of years
- Present amount
- the starting sum / price
Worked example
- $1,000 today
- Average inflation = 3% per year
- Over 10 years
- Future cost = 1,000 × (1.03)¹⁰
- Future cost = 1,000 × 1.344
You'd need ≈ $1,344 in 10 years to buy what $1,000 buys today — so today's $1,000 will then feel like ~$744.
Good to know
- Inflation is measured by a price index (the CPI in the US) — your personal rate varies with what you actually buy (rent, healthcare, and tuition often outpace the headline figure).
- It's why “safe” cash can lose ground: an account paying below the inflation rate grows in dollars but shrinks in real purchasing power.
- For long-range planning, think in real (inflation-adjusted) terms so future sums are comparable to today's prices.
Related Calculators
Frequently Asked Questions
How is inflation measured?
The most common gauge is the Consumer Price Index (CPI), published monthly by the Bureau of Labor Statistics, which tracks the price of a representative basket of goods and services. The year-over-year percentage change in CPI is the headline inflation rate.
How do I calculate inflation's effect on a dollar amount?
For a projected rate: future cost = today's cost × (1 + rate)ⁿ over n years. At 3% inflation, $100 of goods costs about $134 in 10 years. For historical comparisons, multiply by the ratio of the two years' CPI values.
What is purchasing power?
Purchasing power is what your money actually buys. Inflation erodes it: at 3% annual inflation, a fixed $1,000 loses roughly a quarter of its buying power in 10 years. That's why returns and wage growth should be judged after inflation (in "real" terms).
What is a normal inflation rate?
The US Federal Reserve targets 2% average annual inflation, viewing it as consistent with stable prices and healthy growth. Sustained rates well above that erode savings quickly, while deflation (falling prices) brings its own economic problems.
How can I protect my savings from inflation?
Cash loses ground whenever interest earned trails inflation. Common hedges include Treasury Inflation-Protected Securities (TIPS) and Series I savings bonds, which adjust with CPI, and diversified stock investments, which have historically outpaced inflation over long horizons — though with more volatility.