Inflation Calculator
See what today's money will be worth after years of inflation.
Try an example
$13,439.16
About this calculator
What Is Inflation?
Inflation is the general rise in prices over time, which means each unit of money buys less than it used to. Mild inflation is normal in a growing economy — central banks in many developed countries aim for about 2%–3% a year — but over years and decades it adds up: $100 in 1990 buys what costs well over $250 today in the United States. This inflation calculator shows how the purchasing power of money changes between any two points in time, using an average annual inflation rate.
How the Calculation Works
With a constant yearly inflation rate r over t years, Future price = Present amount × (1 + r)t. To find what an old amount is worth in today's money, run the same idea backward: Past amount = Today's amount ÷ (1 + r)t. At 3% inflation, something that costs $1,000 today will cost about $1,344 in ten years, and today's $1,000 has the purchasing power of about $744 ten years from now. Real-world inflation varies year to year, so use a long-run average for planning.
Worked Example
$10,000 today, at 3% annual inflation, has an equivalent cost of $13,439.16 in 10 years — meaning $3,439.16 of future spending is purely the effect of prices rising, not any change in what you're actually buying.
How Inflation Is Measured
Statistics agencies track the Consumer Price Index (CPI): the cost of a fixed basket of goods and services such as food, housing, transportation, healthcare and clothing, compared across time. The percentage change in the CPI is the inflation rate. Because the basket cannot match every household's spending, personal inflation can be higher or lower than the headline number.
What Causes Inflation
- Demand-pull: demand for goods rises faster than supply.
- Cost-push: higher costs for materials, wages or energy push prices up.
- Monetary expansion: a rapidly growing money supply chasing the same goods.
- Expectations: when people expect higher prices, they ask for higher wages and prices, making it self-fulfilling.
Why It Matters for Your Money
Cash sitting still loses value, so the real return on savings is the interest rate minus inflation. Retirement targets, salary negotiations, long-term contracts and pensions all need an inflation assumption. Use the Future Value Calculator to project growth, and the Savings Calculator to see whether your savings are outpacing rising prices.
Worked example
$10,000 today, at 3% annual inflation, has an equivalent cost of $13,439.16 in 10 years — a $3,439.16 loss in purchasing power for the same goods or services.
Frequently asked questions
What inflation rate should I use?
3% is a commonly used long-run average for many developed economies, but actual inflation varies year to year — use a rate that matches the specific period or economic conditions you're modeling.
Does this use real historical inflation data?
No — this calculator projects forward using a constant rate you choose. For converting a past dollar amount into today's dollars using actual historical CPI data, a dedicated CPI inflation calculator is more accurate.
Why does the future cost grow faster in later years?
Inflation compounds — each year's price increase applies to the already-inflated price from the year before, not the original amount, so the effect accelerates over time.
