What does this inflation calculator do?
It measures how inflation erodes money. Enter an amount, a yearly inflation rate and a number of years to see what the same goods will cost later, or leave any one of the four values blank to solve for it: today’s equivalent, the implied rate, or the time.
“Something costs $10,000 today. What will it cost in 20 years at 3% inflation?”
About $18,061. Put the other way, $10,000 will buy 44.6% less than it does now. Try this scenario
How do you calculate purchasing power?
Divide by the inflation factor. A future amount is worth F ÷ (1 + i)n in today’s dollars, and today’s money keeps 1 ÷ (1 + i)n of its buying power. At 3% for 20 years that factor is 1.806, so purchasing power falls 44.6%.
F = P × (1 + i)n · purchasing power lost = 1 − 1 ÷ (1 + i)n
P is the amount today, F the future equivalent, i the yearly inflation rate and n the years. The rate and the years have exact formulas too: i = (F ÷ P)1/n − 1 and n = ln(F ÷ P) ÷ ln(1 + i). See the methodology.
“I’ll need $100,000 in 25 years. What is that in today’s dollars at 3% inflation?”
About $47,761. Plan for $100,000 in nominal terms, but expect it to buy what $47,761 buys today. Try this scenario
“A candy bar went from $1 to $5 over 40 years. What inflation rate is that?”
4.11% a year. Leave Inflation Rate blank and enter both prices and the years. Try this scenario
How long does it take for prices to double?
At 3% inflation, prices double in about 23.4 years; at 2% in 35 years; at 6.5% in about 11. The Rule of 72 gives a quick estimate: divide 72 by the inflation rate. This calculator gives the exact answer from logarithms when you leave Years blank.
“How long until prices double at 3% inflation?”
About 23.45 years. Enter $100 and $200 and leave Years blank. The Rule of 72 estimate is 24 years. Try this scenario
What inflation rate should I use?
For long-range planning, 2.5–3% is a sensible base: U.S. consumer prices rose 2.5% a year over the 30 years to 2025 and 3.0% a year since 1926. The Federal Reserve targets 2%. Test a higher rate too: December-to-December inflation hit 7.0% in 2021 and 6.5% in 2022.
“What does a burst of 6.5% inflation for 10 years do to $10,000?”
The same goods would cost about $18,771, and $10,000 would buy 46.7% less: roughly what 3% does in 20 years. Try this scenario
“And deflation? Prices falling 1% a year for 10 years?”
The same goods would cost about $9,043.82, so $10,000 would buy 10.6% more. Enter a negative rate with the ± button. Try this scenario
Inflation FAQ
Is inflation the same as the cost of living?
Close, but not identical. Inflation here means the average rise in consumer prices, like the CPI. Your own cost of living depends on what you buy: housing, health care and tuition have often risen faster than the average, while electronics have fallen. Use a rate that matches your spending when you can.
How do I protect my savings from inflation?
Earn a return above the inflation rate after tax. Cash usually trails inflation, while stocks have beaten it over long periods, and Treasury Inflation-Protected Securities (TIPS) and I Bonds adjust with the CPI. The compound interest calculator can show savings growth in today’s dollars.
What’s the difference between nominal and real dollars?
Nominal dollars are the numbers on the price tag in any given year. Real dollars adjust for inflation so amounts from different years compare fairly. $18,061 in 20 years at 3% inflation is $10,000 in real, today’s dollars: the same purchasing power.
Can inflation be negative?
Yes. Falling prices are deflation, and your money then buys more over time. It is rare in the U.S. outside recessions; prices fell sharply in the early 1930s. Enter a negative rate with the ± button, and the result card shows a purchasing power gain instead of a loss.