Inflation Calculator

See how inflation affects purchasing power over time. Calculate what today's money will be worth in the future and what a past amount is worth today.

About this Calculator

See how inflation affects purchasing power over time. Calculate what today's money will be worth in the future and what a past amount is worth today.

Formula & Calculations

Formula

Future Value = Present Value × (1 + Rate)^Years

Where:

FV=Future value after adjusting for inflation
PV=Present value (starting amount)
r=Annual inflation rate as a decimal
n=Number of years

Assumptions

Assumes a constant annual inflation rate over the entire period.
Uses annual compounding for simplicity.
Actual inflation varies year to year and across categories of goods.

Calculation Examples

Example 1

Inputs:Amount: $1,000, Inflation Rate: 3%, Years: 10

Result:Future Value: $1,343.92

At 3% annual inflation, $1,000 today will need to be $1,343.92 in 10 years to have the same purchasing power.

Example 2

Inputs:Amount: $1,000, Inflation Rate: 2.5%, Years: 20 (looking back)

Result:Past Value: $610.27

An item costing $1,000 today would have cost approximately $610.27 twenty years ago at 2.5% annual inflation.

Frequently Asked Questions

What causes inflation?

Inflation is primarily caused by demand-pull (too much money chasing too few goods), cost-push (rising production costs), and built-in inflation (wage-price spirals). Central banks manage money supply to keep inflation in check.

What is the average long-term inflation rate?

Historically, the average annual inflation rate in the United States has been around 3% to 3.5%, though it has varied significantly from decade to decade.