A dollar today is not worth a dollar tomorrow, and this calculator shows you exactly how much purchasing power you have gained or lost over any time period. Using Consumer Price Index data, it converts past dollar amounts to today's values and vice versa. That $50,000 salary your parents earned in 1990 had the purchasing power of roughly $120,000 today. Conversely, your $100 grocery bill would have cost about $45 in 1990. Understanding inflation is essential for long-term financial planning, salary negotiations, and evaluating whether your income is actually keeping pace with rising costs.
Inflation Calculator
Purchasing Power of $100 Over Time
How $100 loses value at various inflation rates
| Years | 2% Inflation | 3% Inflation | 4% Inflation | 5% Inflation |
|---|---|---|---|---|
| 5 years | $90.57 | $86.26 | $82.19 | $78.35 |
| 10 years | $82.03 | $74.41 | $67.56 | $61.39 |
| 15 years | $74.30 | $64.19 | $55.53 | $48.10 |
| 20 years | $67.30 | $55.37 | $45.64 | $37.69 |
| 25 years | $60.95 | $47.76 | $37.51 | $29.53 |
| 30 years | $55.21 | $41.20 | $30.83 | $23.14 |
| 40 years | $45.29 | $30.66 | $20.83 | $14.20 |
| 50 years | $37.15 | $22.81 | $14.07 | $8.72 |
How to Use This Calculator
- Enter the dollar amount you want to convert
- Select the starting year — how far back you want to look
- Select the ending year — typically the current year for 'today's dollars'
- View the inflation-adjusted amount and the total percentage change
- Check the average annual inflation rate for that period to understand the compounding effect
How It Works
Inflation erodes purchasing power over time — the same dollar buys less as prices rise. This calculator uses the compound inflation formula to project future values or find past equivalents.
The basic rule:
- Future Value = Present Value × (1 + Inflation Rate)^Years
- Purchasing Power = Original Amount ÷ (1 + Inflation Rate)^Years
- The historical average US inflation rate is about 3.0% per year
- At 3% inflation, prices double roughly every 24 years
Actual inflation varies year by year. The US CPI peaked at over 9% in June 2022 and has historically averaged about 3%. For precise historical calculations, use Bureau of Labor Statistics CPI data.
Tips & Considerations
- The official CPI inflation rate averages about 3% per year historically, but individual categories vary wildly. Healthcare and education have inflated at 5-7% annually while electronics have actually deflated.
- If your salary has not increased by at least 3% per year, you are effectively taking a pay cut in real terms.
- The 'shrinkflation' effect — same price but smaller package — is real inflation that CPI tries to capture but often underestimates.
- Inflation compounds just like interest. At 3% annual inflation, prices double roughly every 24 years.
Frequently Asked Questions
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises over time, decreasing purchasing power. If inflation is 3%, something that costs $100 today would cost $103 a year from now, and your $100 would buy 3% less.
What is the average inflation rate in the US?
The historical average US inflation rate since 1913 is approximately 3.0% per year, as measured by the Consumer Price Index (CPI). However, rates vary significantly — from deflation during the Great Depression to over 14% in 1980 and 9% in 2022.
How does inflation affect savings?
If your savings earn less interest than the inflation rate, you lose purchasing power over time. For example, if inflation is 3% and your savings account earns 1%, you effectively lose 2% per year in real terms. This is why investing in assets that outpace inflation is important for long-term wealth.
What is the Rule of 72 for inflation?
The Rule of 72 helps estimate how quickly prices double. Divide 72 by the inflation rate: 72 ÷ 3% = 24 years for prices to double. At 6% inflation, prices double in about 12 years. This rule also works for investment returns.
What causes inflation?
Inflation is caused by several factors: demand-pull inflation (too much money chasing too few goods), cost-push inflation (rising production costs passed to consumers), and monetary inflation (central banks increasing money supply). Supply chain disruptions and government spending can also drive inflation.
What is the difference between inflation and CPI?
CPI (Consumer Price Index) measures the average change in prices paid by consumers for a basket of goods and services. Inflation is the general rate of price increases. CPI is one way to measure inflation — it tracks specific categories like food, housing, transportation, and healthcare.