Inflation Calculator — Calculate Purchasing Power Over Time
See how inflation erodes the value of money over time and calculate equivalent purchasing power. All calculations happen locally — nothing leaves your browser.
How do you adjust an amount for inflation? Multiply the original amount by (1 + annual inflation rate) raised to the number of years: $1,000 at 3% for 35 years becomes $1,000 × 1.0335 = $2,813.86. That is the same compounding used for interest, applied to prices instead of a balance. The mirror figure is purchasing power lost — 1 − 1 ÷ 1.0335, or 64.5%, of what the money originally bought.
How to Use the Inflation Calculator
- Enter the amount you want to convert — A price, a salary, a savings balance — anything denominated in money. The figure is treated as a value in the start year, and everything else on the page is derived from it.
- Set the start and end years — The gap between them is the exponent, so only the difference matters, not the calendar. The end year must be later than the start year; if it is not, the tool leaves the amount unchanged and reports zero years.
- Choose an average annual inflation rate — This is the one judgement call, and the result is only as good as it. The 3% default is close to the long-run US average, but for a specific stretch of years you should look up the published inflation figures for that period and enter the average.
- Read the equivalent value and the loss — Equivalent Value Today is what the amount would need to be to buy the same goods. Purchasing Power Loss is the mirror figure — how much of the original amount's buying power has gone.
- Check the year-by-year table — Each row shows the compounding factor to four decimals, the running equivalent value and the loss so far. Scroll it to find any intermediate year rather than re-running the calculation with new dates.
- Share or bookmark the result — Every edit rewrites the page URL with your amount, years and rate, so copying the address bar preserves the exact scenario for a colleague or a later comparison.
How This Calculator Works
Inflation compounds. A 3% rise this year applies to prices that already rose 3% last year, which is why the effect over decades is so much larger than the annual figure suggests. The calculation is the standard compound growth formula, with an inflation rate in place of an interest rate:
Equivalent Value = Original Amount × (1 + rate)yearsThe rate is entered as a percentage and used as a decimal, and years is simply the end year minus the start year. The same multiplier drives the other three figures on the page:
- Purchasing power lost is
(1 − 1 ÷ multiplier) × 100. It is not the same as the price rise: a doubling of prices is a 100% increase but only a 50% loss of purchasing power, because the two are reciprocals of each other. - Cumulative inflation on the stat card is a dollar figure — the equivalent value minus the original amount, that is, how many extra dollars the same basket now costs.
- Inflation factor in the table is the multiplier itself, shown to four decimal places, so you can apply it to any other amount by hand.
Where the rate comes from
This tool does not contain a price index. It applies the single average rate you type, compounded evenly across every year in the range, which is why the year-by-year table is a smooth curve rather than the jagged line real inflation traces. That is a deliberate trade-off: it works for any country, any currency and any future date, and it makes the effect of the assumption obvious.
If you need a historical figure to be accurate rather than illustrative, get the real average from a price index first. The US Bureau of Labor Statistics publishes the Consumer Price Index, the UK Office for National Statistics publishes CPI and CPIH, and Eurostat publishes the HICP for the euro area. Take the index value in each year and convert the ratio into an average annual rate:
average rate = (indexend ÷ indexstart)1/years − 1Enter that number here and the result will match an official index-based conversion to the cent, because the two are then doing the same arithmetic. Note also that the rate field accepts 0 to 50 and no negatives, so periods of deflation cannot be modelled directly.
Inflation Multipliers and Purchasing Power Lost
The table below shows the compounding factor and the matching loss of purchasing power for common rates and horizons. It is a quick way to sanity-check a result, or to see how much a one-point difference in the assumed rate matters over a long period.
| Annual rate | 5 years | 10 years | 20 years | 30 years |
|---|---|---|---|---|
| 2% | ×1.104 (9.4% lost) | ×1.219 (18.0%) | ×1.486 (32.7%) | ×1.811 (44.8%) |
| 3% | ×1.159 (13.7% lost) | ×1.344 (25.6%) | ×1.806 (44.6%) | ×2.427 (58.8%) |
| 5% | ×1.276 (21.6% lost) | ×1.629 (38.6%) | ×2.653 (62.3%) | ×4.322 (76.9%) |
| 8% | ×1.469 (31.9% lost) | ×2.159 (53.7%) | ×4.661 (78.5%) | ×10.063 (90.1%) |
A useful shortcut hides in that grid: purchasing power roughly halves after 70 ÷ rate years. At 3% that is about 23 years, at 5% about 14, at 8% under 9. The rule of 70 is the same approximation used for doubling times in compound interest, and it explains why a couple of high-inflation years feel so much worse than the headline percentage: the damage is permanent and it compounds on everything that follows.
Worked Examples
Converting an old price into today's money
Something that cost $100 thirty-five years ago, at a 3% average rate, converts to $100 × 1.0335 = $100 × 2.8139 = $281.39. Purchasing power lost is 1 − 1 ÷ 2.8139 = 64.5%: the original hundred dollars now buys roughly a third of what it did. This is the calculation behind every "in today's money" figure you see quoted in an article.
Checking whether a pay rise was real
Suppose you earned $50,000 twenty years ago and $65,000 now — a 30% increase on paper. At 3% average inflation the earlier salary is worth $50,000 × 1.0320 = $50,000 × 1.8061 = $90,305 in current money. The nominal rise of 30% is well short of the 80.6% needed just to stand still, so real pay has fallen by roughly 28%. Nominal growth only becomes real growth once it clears the inflation multiplier.
Sizing a future expense
The formula works forwards as readily as backwards. A cost of $30,000 a year that you expect to face in 25 years becomes $30,000 × 1.0325 = $62,812 in the money of that year. Planning tools that ask for retirement spending in today's dollars are asking you to skip this step and use a real return instead — mixing the two conventions is the most common way a long-term projection goes wrong.
What the Result Does Not Capture
The obvious limitation is the constant rate. Real inflation arrives unevenly — long quiet stretches punctuated by sharp episodes — and an average conceals that entirely. Two periods with the same average can feel very different, and if your money was concentrated in the years around a spike, the average understates what actually happened to you.
The deeper limitation belongs to price indices themselves, and applies whichever rate you enter. An index tracks a representative basket, but nobody buys the representative basket. If rent takes half your income, your personal inflation rate tracks housing far more closely than the headline figure does. Indices also adjust for quality — a laptop that costs the same as one from a decade ago but does far more is recorded as a price fall — which is defensible methodology but means the number is not a simple price comparison. Regional differences are averaged away, and asset prices such as houses and shares are largely outside the consumer basket, so they routinely move at rates the index never shows.
Results here are informational estimates based on the rate you supply, not official index values or a forecast. For tax, benefit, contract-indexation or legal purposes, use the published index figures from the relevant statistical agency, and speak to a qualified adviser before making financial decisions based on projected inflation.
Frequently Asked Questions
No, and that is worth being clear about. It compounds the single average annual rate you enter across the years between your two dates — there is no price-index lookup behind it. That makes it work for any country, currency or future year, but a historical conversion is only as accurate as the rate you supply. Take the average from a published index such as the US CPI, UK CPI or euro-area HICP and the result will match an official conversion.
US CPI inflation has averaged roughly 3% a year over the long run, which is why 3% is the default here. Individual years vary widely, from mild deflation in some recessions to high single digits in the early 1980s and again in 2022. Central banks in the US, UK and euro area currently target 2%, so 2% to 3% is a reasonable range for forward-looking estimates and a wider band is sensible for anything longer than a decade.
Because they are reciprocals, not opposites. If prices double, the multiplier is 2.0 and the increase is 100%, but the same money now buys 1 ÷ 2 = half as much, a loss of 50%. Purchasing power loss can approach 100% but never reach it, while the price increase has no ceiling. Quoting one when you mean the other is the most common mistake in inflation write-ups.
No. The whole calculation is a few lines of JavaScript running in your tab, with no request made and no account involved. Your amount, years and rate are written into the page URL so a scenario can be bookmarked or shared, which is worth remembering before you paste a link containing your actual salary into a group chat.
Not in this tool — the rate field accepts 0 to 50 and rejects negatives. To look at a deflationary stretch, work it out directly with the same formula: a −1% rate over 10 years gives a multiplier of 0.9910 = 0.904, meaning the same money buys about 10.6% more. For a period that mixes inflation and deflation, use the average over the whole span, which will usually still be positive.
Enter the older figure as the amount, set the years to the period in question, and compare the equivalent value against what you are paid now. If today's pay is below the equivalent, real pay has fallen even though the number on the payslip went up. The same method checks whether a pension increase kept pace, and whether a rent rise beat general inflation or merely matched it.
The arithmetic is identical; only the meaning changes. Here the multiplier is applied to prices, so a bigger number is worse. In the Compound Interest calculator it is applied to a balance, so a bigger number is better. Run both on the same horizon to see whether an investment actually outpaces inflation — the difference between the two rates is your real return.
If the end year is not later than the start year the calculation short-circuits: the headline resets to the original amount with zero years and zero loss, but the year-by-year table and the chart keep showing the previous, valid result. Set the end year past the start year and both refresh. The same happens if you clear a year field mid-edit.
Use Cases
Judging a Job Offer Against an Old Salary
Convert the pay from the role you left five years ago into current money before deciding whether a new offer is a rise. A 12% increase over five years of 3% inflation is a real-terms cut, which is much easier to see as a single equivalent figure.
Making Sense of a Historical Price
Reading that a house, a car or a cinema ticket cost a certain amount decades ago means little on its own. Converting it into today's money turns an anecdote into a comparison, and shows whether that category has risen faster or slower than prices generally.
Sizing a Retirement Budget in Future Money
Take the annual spending you would need if you retired today and project it to your actual retirement year. The result is the figure a fixed nominal pension has to beat, and it usually explains why an income that sounds generous now will not be in thirty years.
Checking Whether Savings Are Losing Ground
Run your balance at the inflation rate and separately at your account's interest rate. If the inflation line ends higher, the account is losing real value every year despite the interest payments — the case for moving cash beyond an emergency fund.
Reviewing a Long Contract or Rent Agreement
Before agreeing a fixed fee, retainer or rent for several years, project it forward to see what it is worth at the end of the term. A five-year flat rate at 3% inflation is worth about 14% less by the final year — often enough to justify negotiating an annual uplift.
Teaching How Compounding Feels
Set the rate to 8% and the span to 30 years, then to 2% and the same span, and let the multipliers speak: ×10.06 against ×1.81. It is a fast demonstration of why a few points of annual difference dominate any one-off number in a long-range plan.