Inflation Calculator
Calculate the impact of inflation on your money. See how purchasing power changes over time.
How it works
Inflation erodes the purchasing power of money over time. This calculator shows two things: (1) how much a current amount of money would need to grow just to keep up with inflation — the future equivalent value; and (2) what today's purchasing power of your money will be worth in real terms after inflation — which is always less than the nominal amount. Formula: Future Equivalent = Amount × (1 + rate)^years. Purchasing Power = Amount / (1 + rate)^years.
Example
If you have $10,000 today and inflation averages 3.5% per year, in 10 years you would need $14,106 to buy the same things that $10,000 buys today. Conversely, if you left $10,000 in a jar with no interest, it would only have the purchasing power of $7,089 in today's dollars after 10 years.
Frequently asked questions
What is a normal inflation rate?
Most central banks, including the U.S. Federal Reserve and the European Central Bank, target an inflation rate of around 2% per year. The U.S. experienced unusually high inflation of 7–9% in 2022–2023 before it gradually declined. Historically, U.S. average inflation has been about 3–3.5% annually over the long term.
How does inflation affect my savings?
If your savings account earns less than the inflation rate, you are losing real purchasing power even as your nominal balance grows. For example, if inflation is 4% and your savings account pays 1%, your real return is −3%. This is why it's important to invest in assets that outpace inflation over time.
What assets protect against inflation?
Historically, stocks, real estate, commodities (like gold and oil), Treasury Inflation-Protected Securities (TIPS), and I-Bonds have provided protection against inflation over long periods. Cash and fixed-rate bonds tend to lose real value during high-inflation periods.
What is the Consumer Price Index (CPI)?
The CPI is the most commonly used measure of inflation in the United States. It tracks the average change in prices paid by urban consumers for a basket of goods and services including food, housing, transportation, medical care, and education.
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