Inflation Calculator
Formula
Future = Amount × (1 + Rate)^Years
Inflation erodes purchasing power over time. $100 today at 3% average inflation will feel like $55 in 20 years. Conversely, $100 from 20 years ago had the purchasing power of $181 today.
How to use
- Enter the starting Amount in dollars.
- Set the Avg. Inflation Rate (%) you want to use.
- Enter the number of Years, then read future value and past purchasing power.
Example
Start with $100 at 3% average inflation over 20 years. Future value = 100 × (1.03)^20 = $180.61 — you'd need $180.61 in 20 years to match $100 of buying power today. Past purchasing power = 100 ÷ (1.03)^20 = $55.37 — what you'd have needed 20 years ago to match $100 today.
Frequently Asked Questions
What is the average US inflation rate?
Historically about 3% per year (2-3% in recent stable periods, higher during crises).
Why does inflation matter?
If your savings don't grow faster than inflation, you're losing purchasing power. A savings account at 1% with 3% inflation means you lose 2% real value per year.
How is this different from an official CPI-based inflation calculator?
This tool applies a single average rate that you choose evenly across every year, which is great for projections and quick estimates. Official calculators, like the one from the Bureau of Labor Statistics, use the actual Consumer Price Index for each specific year, so they reflect the real ups and downs of history. For looking up exact past values, the CPI version is more precise; for forecasting the future, an average rate is the practical choice.
What inflation rate should I use for future planning?
Many financial planners assume around 2.5 to 3 percent for long-range projections, since that aligns with the Federal Reserve's roughly 2 percent target plus a small cushion. If you want a more conservative plan, model a higher rate like 4 percent to see how badly inflation could erode your savings. Running a couple of scenarios is wiser than betting everything on one number.