🔥 Inflation Calculator
Inflation Calculator — Purchasing Power Over Time
See how inflation erodes the value of money. Calculate future purchasing power, find what past money is worth today, and compare nominal vs real investment returns.
~3.2%
US Avg. Since 1913
2.0%
Fed Target Rate
$0.24
Value of 1913 $1 Today
~72 / rate
Rule of 72 (yrs to halve)
📉 Forward Inflation
🔙 Backward / Historical
📊 Real vs Nominal
📈 Decay Chart
Inflation Calculator
Forward · Backward · Real vs Nominal Return
📉 Forward
🔙 Backward
📊 Real vs Nominal
How Much Will Today's Money Be Worth?
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yrs
What Was Past Money Worth in Today's Dollars?
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%
yrs
Strip Inflation from Your Investment Return
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$0
Purchasing Power
$0
Value Lost
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Price Factor
0 yrs
Halves Every
📉 Purchasing Power Decay Over Time
📊 Inflation Sensitivity — Same Amount, Different Rates
Your rate highlighted ✦
| Inflation Rate | Future Purch. Power | Value Lost | % Retained |
|---|
📋 Year-by-Year Purchasing Power Schedule
| Year | Purchasing Power | Value Lost | Price Level | % of Original |
|---|
The Inflation Formula
Forward (future purchasing power): PP = Amount / (1 + r)^n
Price level (how much you need): Future Price = Amount × (1 + r)^n
Backward (what past money is worth today): Today's Value = Past Amount × (1 + r)^n
Real return (Fisher equation): Real Rate = (1 + Nominal) / (1 + Inflation) − 1
How Inflation Erodes Purchasing Power
| Inflation Rate | $10,000 in 10 yrs | $10,000 in 20 yrs | $10,000 in 30 yrs | Years to Halve |
|---|---|---|---|---|
| 1% | $9,048 | $8,187 | $7,408 | 72 yrs |
| 2% | $8,203 | $6,730 | $5,521 | 36 yrs |
| 3% | $7,441 | $5,537 | $4,120 | 24 yrs |
| 5% | $6,139 | $3,769 | $2,314 | 14.4 yrs |
| 7% | $5,083 | $2,584 | $1,314 | 10.3 yrs |
| 10% | $3,855 | $1,486 | $573 | 7.2 yrs |
US Historical Inflation Rates
| Period | Avg. Annual CPI | Context |
|---|---|---|
| 1913–1920 | ~9% | WWI, money printing |
| 1920s–1930s | ~1% (+ deflation) | Great Depression deflation |
| 1940s | ~5% | WWII supply constraints |
| 1970s | ~7.4% | Oil shock, stagflation |
| 1980–1990 | ~5.5% | Volcker disinflation |
| 1990–2020 | ~2.5% | Great Moderation |
| 2021–2022 | ~7–9% | COVID supply shock |
| 2023–2025 | ~3–4% | Post-COVID normalization |
Frequently Asked Questions
Purchasing power is the quantity of goods and services your money can buy. When inflation rises, prices go up — meaning each dollar buys fewer goods. At 3% annual inflation, $1,000 today will only buy what $744 buys in 10 years. The formula is: Future PP = Amount / (1+rate)^years. After 20 years at 3% inflation, a dollar retains only 55 cents of its original purchasing power.
The Rule of 72 estimates how long it takes for inflation to halve the purchasing power of your money: Years to halve = 72 / Inflation Rate. At 3% inflation, purchasing power halves every 24 years. At 6%, every 12 years. At 9%, every 8 years. It's a quick mental math shortcut to understand inflation's power over time.
Nominal return is the stated return on an investment before adjusting for inflation. Real return is the increase in actual purchasing power. Fisher equation: Real Rate = (1 + Nominal Rate) / (1 + Inflation Rate) − 1. Example: 8% nominal return with 3% inflation → real return = 1.08/1.03 − 1 = 4.85%. That 4.85% is the actual gain in purchasing power — the amount above inflation.
Since the Fed was created in 1913, US CPI inflation has averaged about 3.2% per year. The Fed's current target is 2%. Notably high periods: 1970s (oil crisis, ~7-8%), 2021-2022 (post-COVID, ~7-9%). Low periods: 2010-2020 (averaging ~1.7%). For long-term planning, 2.5-3% is a reasonable central assumption, with 5% for a conservative (high-inflation) scenario.
To beat inflation, investments must earn a real return above zero. Historical options: US stocks (~10% nominal, ~7% real) — best long-term inflation hedge. Real estate — tends to appreciate with inflation. TIPS (Treasury Inflation-Protected Securities) — US government bonds that adjust with CPI. I-Bonds — US savings bonds pegged to inflation. Commodities (gold, oil). High-yield savings or CDs in high-rate environments. Cash and traditional savings accounts typically fail to keep pace with inflation over time.