Understand how inflation impacts your money over time. Enter a dollar amount, expected inflation rate, and time horizon to see the future equivalent cost and how much your current money will really be worth.
Future Equivalent Cost—
Purchasing Power of Original Amount—
Total Inflation Over Period—
Price Increase—
This calculator provides estimates and is for informational purposes only.
How It Works
Inflation measures the rate at which the general level of prices for goods and services rises, eroding purchasing power. This calculator uses the compound interest formula applied to price increases: Future Cost = Current Amount × (1 + Inflation Rate)^Years. Conversely, the purchasing power of your money decreases by the inverse of the same factor. For example, at 3% annual inflation, something that costs $100 today would cost about $134.39 in 10 years, and your $100 would only have the buying power of about $74.41 in today's dollars.
Frequently Asked Questions
What is a typical inflation rate?
Historically, the US has averaged about 3% annual inflation. However, rates can vary significantly year to year. The Federal Reserve targets approximately 2% annual inflation for long-term price stability.
How does inflation affect my savings?
If your savings earn less interest than the inflation rate, your money loses real value over time. For example, cash in a 1% savings account during 3% inflation effectively loses 2% of purchasing power each year. This is why investing is important for long-term goals.
What causes inflation?
Inflation can be driven by increased demand for goods (demand-pull), rising production costs (cost-push), or expansion of the money supply. Central bank policies, supply chain disruptions, energy prices, and consumer expectations all play a role.