This inflation calculator shows how rising prices change what your money can buy. Point it forward in either direction: see the future buying power of cash you hold today, or estimate what something that costs a fixed amount now will cost years from now.
Enter an amount, an assumed annual inflation rate, and a number of years. The default 3% rate is close to the long-run U.S. average, but you can test any scenario — from the Federal Reserve’s 2% target to the 8%+ spikes of 2022 — to see how sensitive your savings are to inflation.
The Inflation Formula
Inflation compounds just like interest, only against you. Both directions use the same growth factor:
- Future cost = amount × (1 + rate)^years
- Future buying power = amount ÷ (1 + rate)^years
- Purchasing power lost = 1 − 1 ÷ (1 + rate)^years
Because the effect compounds, small rates do serious damage over long periods. At 3% inflation, prices double roughly every 24 years (the Rule of 72: 72 ÷ 3 = 24). A useful mirror image: money losing 3% of its purchasing power annually keeps only about 74% of its value after 10 years and about 55% after 20.
What Inflation Rate Should You Use?
Historical U.S. Consumer Price Index (CPI) data gives good reference points:
- Long-run average since 1913: roughly 3.3% per year
- Recent decades (1990s–2010s): closer to 2.5%, with the 2010s often below 2%
- Federal Reserve target: 2% (measured by PCE, which usually runs slightly below CPI)
- 2021–2022 spike: CPI peaked at 9.1% year-over-year in June 2022
For long-term planning, 2.5%–3% is a defensible middle ground. Remember that your personal inflation rate can differ from CPI — healthcare, college tuition, and housing have historically outpaced the overall index, while consumer electronics have gotten cheaper.
Example: $10,000 Over 10 Years at 3%
Suppose you keep $10,000 in cash earning nothing while inflation runs 3% per year for 10 years.
- Growth factor: (1.03)^10 = 1.3439
- Future buying power: $10,000 ÷ 1.3439 = $7,440.94
- Purchasing power lost: 25.6%
Your account still says $10,000, but it buys only what about $7,441 buys today. Flip the question: a basket of goods costing $10,000 today will cost $10,000 × 1.3439 = $13,439.16 in a decade — a 34.4% total price increase. This is why long-term savings generally need to earn returns above inflation just to stand still.
Frequently Asked Questions
What is the average inflation rate in the US?
The long-run average is about 3.3% per year based on CPI data going back to 1913. Over more recent decades it has averaged closer to 2.5%, and the Federal Reserve explicitly targets 2%. Individual years vary widely — from deflation in 2009 to 9.1% in mid-2022.
How much will $100 be worth in 10 years?
At 3% annual inflation, $100 will have the buying power of about $74.41 in today’s dollars after 10 years — a loss of roughly 26%. At 2% inflation the figure is about $82.03, and at 5% it drops to about $61.39.
What is purchasing power?
Purchasing power is the quantity of goods and services a unit of money can buy. When prices rise, each dollar buys less, so its purchasing power falls. Inflation calculators quantify this by converting a future dollar amount into its equivalent in today’s dollars.
How fast do prices double with inflation?
Use the Rule of 72: divide 72 by the inflation rate to estimate the doubling time in years. At 3% inflation prices double roughly every 24 years; at 6% every 12 years; at 9% — near the 2022 peak — about every 8 years.
How do I protect my savings from inflation?
Hold assets whose returns have historically beaten inflation: diversified stock funds have averaged about 10% nominally (roughly 7% after inflation) over long periods. Treasury Inflation-Protected Securities (TIPS) and Series I savings bonds adjust directly with CPI. Cash and low-yield accounts lose ground during high-inflation years.