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What is Inflation Calculator?
An inflation calculator shows how the purchasing power of money changes over time. Enter an amount and two years to see what that money would be worth after accounting for cumulative inflation, using historical Consumer Price Index (CPI) data.
How to Use
- Enter a dollar amount
- Select the starting year (the year the amount is from)
- Select the ending year (the year you want to compare to)
- View the equivalent amount adjusted for inflation and the cumulative rate
Formula
Adjusted Amount = Original Amount x (CPI in End Year / CPI in Start Year)
Frequently Asked Questions
- What is the average annual inflation rate?
- The US has averaged about 3-3.5% annual inflation historically. Recent years have seen higher rates (7-9% in 2022), while the Federal Reserve targets 2% as ideal.
- How does inflation affect my savings?
- If your savings earn less interest than the inflation rate, your money loses purchasing power over time. A 2% savings rate during 5% inflation means you're losing 3% in real value annually.
- What is the CPI?
- The Consumer Price Index measures the average price change of a basket of consumer goods and services over time. It's the most widely used measure of inflation.