Free Inflation Calculator — Calculate Purchasing Power Over Time
Inflation is the gradual increase in prices that reduces the purchasing power of money over time. Understanding inflation is crucial for financial planning, retirement savings, and investment decisions. Our inflation calculator helps you visualize exactly how much your money will be worth in the future, or how much past amounts are equivalent to in today's dollars.
The calculator uses the compound inflation formula: Future Value = Present Value / (1 + inflation rate)^years. This means that with a 3% annual inflation rate, $100 today will have the purchasing power of only about $74 in 10 years. Conversely, $100 from 10 years ago has the equivalent purchasing power of about $134 today.
You can use two modes: "Future Value" shows how inflation erodes your money over time — essential for retirement planning and long-term savings goals. "Past Value" shows what an amount from the past would be worth today — useful for understanding historical prices, comparing salaries across decades, or evaluating real estate appreciation versus inflation.
The year-by-year breakdown table provides a detailed view of how purchasing power changes annually. This visual representation makes it clear why keeping money in a non-interest-bearing account is a losing strategy. Even moderate inflation of 2-3% per year can significantly reduce your wealth over a 20-30 year period, making it essential to invest in assets that at least match the inflation rate.