Inflation Calculator
See how inflation raises prices over time and how much your money’s buying power shrinks.
Inflation Calculator
At 3.5% inflation for 20 years, something that costs $10,000 today would cost about $19,897.89. Put the other way, $10,000 would only buy what $5,025.66 buys today, a purchasing-power loss of about 49.7%.
How to use this inflation calculator
- Enter the amount in today’s dollars.
- Enter the yearly inflation rate you expect.
- Enter the number of years.
- Read the future equivalent cost, the purchasing-power loss and the real value in today’s dollars.
The math behind the result
Future cost = Amount × (1 + inflation)years and Real value = Amount ÷ (1 + inflation)years.
Purchasing-power loss = 1 − 1 ÷ (1 + inflation)years.
Worked example
$10,000 at 3.5% inflation for 20 years:
- Future equivalent: $19,897.89
- Real value in today’s dollars: $5,025.66
- Purchasing-power loss: 49.7%
Why inflation matters for savings
If your savings earn less than inflation, their buying power falls even though the balance rises. A 3.5% rate halves purchasing power in about 20 years.
Which inflation rate to use
U.S. inflation has varied widely. The Bureau of Labor Statistics publishes the Consumer Price Index (CPI). For long-term planning many people test a range such as 2%, 3% and 4%.
Protecting against inflation
Investments that have historically kept pace with inflation include a diversified stock portfolio, Treasury Inflation-Protected Securities (TIPS) and Series I savings bonds. Compare with our compound interest calculator.
Key terms
- Inflation
- The general rise in prices over time.
- Purchasing power
- How much a unit of money can buy.
- CPI
- Consumer Price Index, the main U.S. measure of inflation.
- TIPS
- Treasury bonds whose principal adjusts with inflation.
Frequently asked questions
How do you calculate the effect of inflation?
Multiply today’s amount by one plus the inflation rate, raised to the number of years, to find the future cost.
What is a normal inflation rate?
The Federal Reserve targets about 2% a year over time, though actual rates move above and below that.
How fast does inflation halve the value of money?
Roughly 72 divided by the rate. At 3.5% it takes about 20 years.
Where can I find the official rate?
The Bureau of Labor Statistics publishes the CPI every month.
Sources and further reading
Related calculators
Related guides
Figures in the examples are illustrative and use the inputs shown. Market rates and program rules change; confirm current terms with your lender or the linked official sources before making a decision.
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Built by Abdul Rahman · Last reviewed: · Report an error
Disclaimer: This calculator provides estimates for educational purposes only and is not financial, tax, or legal advice. Results depend on the figures you enter and on simplified assumptions; actual rates, taxes, and outcomes will differ. Consult a qualified professional before making financial decisions.