Inflation calculator

Fill in the three fields on the form:

1. Amount today: the dollar figure you want to analyze. It can be the price of something specific (a car, a year of college tuition) or savings sitting idle in a checking account. 2. Annual inflation rate: the average rate you expect over the period, as a percentage. If you don't have a better figure, the Federal Reserve's target of about 2% is a reasonable baseline for the United States; pick something higher to stress-test a pessimistic scenario. Negative values are allowed if you want to model deflation. 3. Years: the time horizon, from 1 to 50 years.

The calculator returns three results instantly. The future equivalent cost tells you how many dollars you will need after that many years to buy what the initial amount buys today. The remaining purchasing power shows the real value, in today's dollars, your money will have if it just sits there earning nothing. The loss of purchasing power expresses that erosion as a percentage. Try several scenarios (2%, 3%, 4%) to see how sensitive the outcome is to the rate you choose — over long horizons, a single percentage point changes the picture dramatically.

The calculator applies standard compound-interest math in reverse: instead of growing your money, it grows the prices around it. The formula in plain text:

`` factor = (1 + rate/100) ^ years future cost = amount × factor purchasing power = amount / factor loss (%) = (1 − 1/factor) × 100 ``

Say Dana, in Ohio, sets aside $60,000 for her daughter's college fund and parks it in a non-interest checking account. She assumes average inflation of 3% a year over the 20 years until enrollment. The factor is (1 + 0.03)^20 = 1.8061. What costs $60,000 today will cost 60,000 × 1.8061 = $108,366.67 in 20 years. If the money just sits there, those $60,000 will only stretch as far as 60,000 / 1.8061 = $33,220.55 does today. Dana would lose 44.63% of her buying power without spending a dime — nearly $27,000 evaporated in real terms.

The practical takeaway: to keep the fund whole, Dana needs an average net return of at least 3% a year, which is why college savers typically use vehicles like 529 plans or index funds rather than cash.

In the United States, inflation is tracked by the Consumer Price Index (CPI), published monthly by the Bureau of Labor Statistics, and the Federal Reserve steers monetary policy toward an average inflation target of about 2%. Over recent decades, US inflation has mostly stayed in a moderate 2-3% band, but history shows it can break out: the 1970s and early 1980s brought double-digit rates that took painful interest-rate hikes to tame, and the 2021-2023 episode delivered the fastest price growth in roughly four decades before cooling off.

For long-term simulations in the US, a 2-3% annual assumption is a sensible baseline; a conservative planner might also test 3.5-4%. Keep in mind that headline CPI is an average across a broad basket: medical care, college tuition and housing have historically outpaced it for long stretches, so if your spending is concentrated there, your personal inflation rate may run higher than the official number.

This calculator is an educational simulation tool: it does not predict future inflation and is not financial advice. For investment or retirement planning decisions, consult a qualified professional.

This inflation calculator turns that abstract effect into your own numbers. Enter an amount of money, an annual inflation rate and a time horizon in years, and you get three answers: what it will cost in the future to buy what that amount buys today, how much purchasing power your cash will retain if it just sits there, and what percentage of buying power you will have lost along the way. It is an educational tool for planning savings goals, sanity-checking a raise against rising prices, or understanding why idle cash in a non-interest checking account quietly shrinks.