Inflation Calculator
Calculate the future value of money adjusted for inflation, or find the real value of a past amount in today's dollars.
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How to use this calculator
Compound the inflation rate over the number of years to find how much purchasing power changes.
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Enter the amount you want to evaluate.
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Enter the expected or historical annual inflation rate.
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Enter the number of years.
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See how much purchasing power changes and what the equivalent future amount is.
Frequently asked questions
What is the average inflation rate?
Long-run average CPI inflation in the US has been about 3.1% annually since 1913. The UK averages ~3.3%. Germany ~2.5%. Developed-world central banks typically target 2% inflation. The 2021–2023 period saw unusually high inflation of 6–9% in many countries.
How does inflation affect savings?
If your savings earn less than the inflation rate, your real purchasing power declines. At 3% inflation, money under a mattress loses half its real value in 24 years. A savings account earning 4% when inflation is 3% earns a 1% real return.
What is the Rule of 70 for inflation?
Divide 70 by the inflation rate to estimate how many years it takes for prices to double. At 3.5% inflation: 70 / 3.5 = 20 years. At 7% inflation: 70 / 7 = 10 years. This is useful for quickly visualising the erosion of purchasing power.
How is inflation measured?
Most countries use a Consumer Price Index (CPI) based on a basket of goods and services representative of typical household spending. Core CPI excludes food and energy (which are volatile). PCE (Personal Consumption Expenditures) is the US Federal Reserve's preferred measure.
Inflation and purchasing power explained
How inflation erodes wealth
At 3% annual inflation, $10,000 today requires $18,061 in 20 years to buy the same goods — a 81% increase in nominal cost. Savings that earn below the inflation rate lose purchasing power silently each year. This is why long-term financial planning must account for inflation.
Inflation and investment returns
A 7% investment return sounds great until inflation is 4% — the real return is only 3%. The Fisher equation states: real return ≈ nominal return − inflation rate. Always compare investment returns against inflation when evaluating long-term performance.
Protecting against inflation
Assets that historically hedge against inflation include: equities (companies can raise prices), real estate (values and rents tend to rise with inflation), commodities (especially gold), and inflation-linked bonds (TIPS in the US, index-linked gilts in the UK). Cash and fixed-rate bonds are the worst inflation hedges.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →