Inflation Calculator
Ever wonder what $100 from 1980 would be worth today? Or how much purchasing power your current savings might have had in the past? Our Free Inflation Calculator uses historical data to show you how the value of money changes over time due to inflation. Understand the real impact of inflation on prices and purchasing power.
Calculate Inflation's Impact
How to Use the Inflation Calculator
- Enter Initial Amount: Input the amount of money you want to evaluate.
- Select Start Year: Choose the year this amount is from.
- Select End Year: Choose the year you want to compare its value to.
- (Country Note): This calculator currently uses historical inflation data for the United States.
- Calculate: Click "Calculate" to see the adjusted value and the total inflation rate.
What is Inflation?
Inflation is the rate at which the general level of prices for goods and services is rising, and consequently, the purchasing power of currency is falling. It is typically caused by factors such as increased demand (demand-pull) or rising production costs (cost-push).
What is the Consumer Price Index (CPI)?
The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is the most widely used measure of inflation. This calculator uses CPI data provided by the U.S. Bureau of Labor Statistics (BLS) for calculations related to the United States.
Understanding Purchasing Power
Purchasing power is the value of a currency expressed in terms of the amount of goods or services one unit of money can buy. As inflation rises, the purchasing power of money erodes, meaning that the same amount of money buys fewer goods and services than it did in the past.
How Inflation Affects Savings & Investments
Inflation has a direct impact on savings and investments. For your wealth to grow in real terms, the return on your investments must be higher than the rate of inflation. If your savings earn an interest rate that is lower than the inflation rate, you are effectively losing purchasing power over time.
Frequently Asked Questions (FAQ)
FAQ Index
- What data is this inflation calculator based on?
- How far back do the inflation records go for this calculator?
- Can I calculate inflation for countries other than the USA?
- What is "purchasing power"?
- How is the total inflation rate calculated between two years?
- How is the average annual inflation rate calculated?
- Does this calculator account for deflation?
- Why might my personal inflation experience differ from the CPI rate?
- Can I use this calculator to predict future inflation?
- How does inflation impact my savings?
This calculator uses the official Consumer Price Index (CPI-U) data for the United States, as published by the U.S. Bureau of Labor Statistics (BLS).
The U.S. CPI data used generally goes back to 1913. The year selections in the calculator reflect the available data range.
This current version of the calculator is specifically designed for United States inflation data. Support for other countries may be considered in future updates.
Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Inflation erodes purchasing power over time.
The total inflation rate is calculated based on the change in the Consumer Price Index (CPI) between the start year and the end year. It's `((CPI_EndYear / CPI_StartYear) - 1) * 100%`.
The average annual inflation rate is the geometric average rate that, if compounded annually over the period, would result in the observed total inflation. It provides a smoothed annualized figure.
Yes. If the Consumer Price Index was lower in the end year than in the start year (which is rare but possible for short periods), the calculator would show a negative inflation rate, indicating deflation and an increase in purchasing power.
The CPI measures the average change in prices for a broad basket of goods and services representative of urban consumers. Your personal spending habits might differ significantly from this average, so your individual inflation rate could be higher or lower.
No, this calculator uses historical CPI data to show past inflation. Predicting future inflation is complex and involves many economic forecasts and variables not covered by this tool.
If the interest rate earned on your savings is lower than the inflation rate, your savings will lose purchasing power over time, meaning you can buy less with that money in the future.