Inflation Calculator

What Is Inflation?

Inflation is the rate at which the general price level of goods and services rises over time, reducing purchasing power. A dollar today buys less than a dollar did a decade ago. Central banks typically target a 2% annual inflation rate as a sign of a healthy economy.

How This Calculator Works

Enter a starting amount, an annual inflation rate, and a number of years. The calculator shows:

• The equivalent future value (how much you'll need to maintain purchasing power)
• The equivalent past value (what today's amount was worth before)
• Total purchasing power lost

Inflation Formula

Future Value = Present Value × (1 + inflation rate)^years

Example: $10,000 with 3% inflation over 20 years:

$10,000 × (1.03)^20 = $18,061 — you would need $18,061 in 20 years to match today's $10,000 in purchasing power.

Real vs Nominal Returns

When evaluating investments, always consider the real return (after inflation):

Real Return ≈ Nominal Return − Inflation Rate

A savings account paying 3% when inflation is 3% gives a 0% real return — your money buys no more than before.

Historical Inflation Context

• US average (1990–2024): ~2.5% per year
• UK average (1990–2024): ~2.8% per year
• Post-COVID peak (2022): 7–10% in many countries

How to Use This Calculator

Using our calculator is simple: enter the required values into the input fields and click the calculate button. Results are displayed instantly on screen. You can adjust the values and recalculate to compare different scenarios and find the best option for your situation.

Frequently Asked Questions

Important Notes

This calculator is provided for informational purposes only. For legal, financial, or medical decisions, always seek advice from qualified professionals. Calculation results do not constitute official documents. Legislative changes may affect results; please visit the relevant official website for the most up-to-date information. Our calculators are regularly updated to reflect current regulations and rates.

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