🎈 Inflation Calculator
See how inflation erodes purchasing power over time. Compare nominal vs real value.
Inflation Parameters
What will $X be worth in Y years?
Rule of 70 for Inflation
Prices double in ~ 23 years
Amount needed in the future to match today's purchasing power
$18,061.11
$10,000 today will need $18,061.11 in 20 years
🛒 Real-World Comparison
See what everyday items might cost in the future
Coffee
$4.50
→
$8.13
Bread
$3.00
→
$5.42
Gas (1 gal)
$3.50
→
$6.32
Monthly Rent
$1500.00
→
$2709.17
Purchasing Power Decay
How Inflation Works
Forward Calculation (Future Value)
FV = PV × (1 + r)^n
Future Value = Present Value × (1 + Inflation Rate)^Years
- PV = Present Value
- r = Annual inflation rate (e.g. 3% = 0.03)
- n = Number of years
Reverse Calculation (Present Value)
PV = FV ÷ (1 + r)^n
Present Value = Future Value ÷ (1 + Inflation Rate)^Years
Purchasing Power Formula
Purchasing Power = 1 ÷ (1 + r)^n
Shows what percentage of your money's value remains after inflation
Rule of 70 for Inflation：Prices double in ≈ 70 ÷ Inflation Rate years
Example: at 3% inflation, prices double in ~23.3 years.
Example
$10,000 today at 3% inflation for 20 years:
• You would need $18,061 in 20 years to match today's $10,000
• $10,000 in 20 years would only be worth $5,537 in today's dollars
• Purchasing power remaining: 55.4%, lost: 44.6%
• Coffee: $4.50 today → ~$8.13 in 20 years
• Monthly rent: $1,500 today → ~$2,709 in 20 years
❓ FAQ
What is inflation and why does it matter?＋
Inflation is the rate at which prices rise over time. At 3% inflation, $100 today will only buy $74 worth of goods in 10 years.
What is the historical average inflation rate?＋
The US long-term average is ~3%. Developed countries range 1-3%. Emerging markets can be 5-15% or higher.
How does inflation affect my savings?＋
If your savings earn 1% but inflation is 3%, you're losing 2% purchasing power annually. Invest in assets that outpace inflation.
What is the difference between CPI and core inflation?＋
CPI includes all items. Core inflation excludes volatile food and energy prices. Central banks often target core inflation.
What investments protect against inflation?＋
Real estate, stocks, TIPS (Treasury Inflation-Protected Securities), commodities, and gold historically hedge against inflation.
How does the Rule of 70 work for inflation?＋
Prices double in approximately 70 ÷ Inflation Rate years. At 3% inflation, prices double every ~23 years.
Why do central banks target 2% inflation?＋
2% is considered stable - high enough to avoid deflation, low enough to preserve purchasing power. It gives central banks room to cut rates in recessions.
How does inflation affect mortgage and loan decisions?＋
Inflation erodes the real value of fixed-rate debt over time. A 30-year mortgage becomes cheaper in real terms as inflation rises.