Inflation Calculator
Calculate future price increases and purchasing power loss caused by annual inflation rates.
Inflation Analysis
What a sum from the past is worth now
Inflation is the decline in what a unit of currency buys. An inflation calculator restates a sum from one year in another year's money using a price index — usually the Consumer Price Index — so that historical figures become comparable. A $50,000 salary in 1995 is not a $50,000 salary today, and the index is how you find out what it actually was.
The compounding is the part that surprises people. At 3% a year, prices double in roughly 24 years and quadruple in 48. This is why a nominal return must be read against inflation to mean anything: an account paying 4% while prices rise 3% is growing your purchasing power by about 1%, and one paying 2% in the same conditions is quietly shrinking it.
Two caveats about the index. CPI tracks a fixed basket for an average household, and your own inflation rate depends on what you actually buy — housing, energy and education have run well above the headline figure in many periods, while consumer electronics have run below it. And methodology changes over time, so very long comparisons carry more uncertainty than the precision of the output implies. Treat the result as a solid estimate, not a measurement.
Frequently asked questions
How does inflation erode purchasing power?
As prices rise over time, each unit of currency buys a smaller percentage of a good or service.
How is inflation measured?
Most commonly by the Consumer Price Index, which tracks the price of a fixed basket of goods and services over time. Variants exist - core CPI excludes food and energy for their volatility, and the US Federal Reserve targets PCE rather than CPI, which typically runs a few tenths lower.
How do I adjust a historical amount for inflation?
Multiply by the ratio of the price indices: amount x (index now / index then). $100 in 1990 with CPI at 130.7 then and roughly 310 now is about $237. This is the correct way to compare wages, prices or budgets across decades.
Why does official inflation not match my experience?
Because CPI tracks an average basket, and your basket is not average. If your spending is weighted toward housing, healthcare or education - all of which have outpaced headline inflation - your personal rate is higher. Renters and homeowners in particular experience very different housing cost changes.