Inflation Calculator
Calculate the impact of inflation on purchasing power over time.
Examples
Cost of Living in 20 Years
Historical Purchasing Power
Frequently Asked Questions
What is the average inflation rate?
How does inflation affect savings?
What is the difference between forward and backward mode?
Quick Tips
- •The US historical average inflation rate is approximately 3% per year.
- •Use the backward mode to understand how prices have changed over time.
- •Inflation compounds, so even small differences in rate produce large effects over long periods.
How to Use This Calculator
Enter the dollar amount you want to adjust, the number of years, and the annual inflation rate. Choose Forward to see how much you will need in the future to match today's purchasing power, or Backward to see what a past amount would be worth today. Click Calculate to view the adjusted amount and a year-by-year breakdown.
Understanding the Formula
Forward (Future Value): FV = PV * (1 + r)^n. Backward (Past Value): PV = FV / (1 + r)^n. Where r = annual inflation rate, n = number of years.
Examples
Cost of Living in 20 Years
If you spend $50,000/year today and inflation averages 3%, in 20 years you will need about $90,306 to maintain the same lifestyle.
Historical Purchasing Power
$100 in 2000 had the purchasing power of roughly $58 in 2024 dollars when adjusted for ~3% average inflation over 24 years.
Frequently Asked Questions
What is the average inflation rate?
The US historical average is around 3% per year, though it varies. The Federal Reserve targets 2% annual inflation.
How does inflation affect savings?
Inflation erodes purchasing power over time. Money in a savings account earning less than the inflation rate effectively loses value each year.
What is the difference between forward and backward mode?
Forward mode tells you how much a future amount will feel like in today's dollars. Backward mode tells you what a past amount was worth relative to today.