inflation-calculator
Calculate how inflation changes the value of money over time.
Formula
Adjusted Value = Original Amount × (1 + Inflation Rate) ^ Years
Frequently Asked Questions
What does inflation mean?
Inflation is the rate at which the general price level of goods and services rises, reducing the purchasing power of money. If inflation is 3%, something that cost $100 last year might cost $103 today.
Why is the 3.2% average inflation rate used?
The average US inflation rate over the past several decades has been approximately 3.2% per year. This is a reasonable long-term average, though actual rates vary by year and are affected by economic conditions.
What is purchasing power?
Purchasing power is how much goods or services you can buy with a specific amount of money. As inflation increases, your purchasing power decreases. For example, $100 today can buy less than $100 could buy 10 years ago.