Free Inflation Calculator
Inflation quietly shrinks what every dollar buys. Enter an amount, pick a start year and end year, and set an annual inflation rate to see the future equivalent, the total price increase, and what a dollar from the start year is worth at the end.
This free inflation calculator compounds an annual inflation rate over your chosen years: future value equals the starting amount times (1 + rate) raised to the number of years. For example, $10,000 at 3 percent annual inflation for 20 years grows to about $18,061 in future dollars, which means prices rose about 81 percent and each original dollar buys only about 55 cents of goods.
Estimates only. Actual inflation varies year to year and differs across goods, services, and regions. This tool compounds a single constant rate, which is a simplification. Not financial advice.
Email me my results
Get your calculation sent to your inbox, plus occasional tips about our free tools.
How inflation math works
Inflation math is compound growth applied to prices. If prices rise 3 percent a year, something that costs $100 today costs $103 next year, then $106.09 the year after, because the 3 percent applies to the new higher price each time. The formula is future value equals present value times (1 + r) raised to n, where r is the annual inflation rate and n is the number of years.
Run the classic example: $10,000 at 3 percent for 20 years. (1.03) raised to 20 is about 1.806, so the future equivalent is about $18,061. Prices rose roughly 81 percent. Flip it around and each dollar from year one buys 1 divided by 1.806, about 55 cents, of goods in year 20. That is the purchasing power view, and it is the number that matters for savers.
Small rate differences compound into big gaps. At 2 percent for 30 years, prices rise about 81 percent. At 4 percent for 30 years, prices rise about 224 percent, more than tripling. This is why central banks treat the difference between 2 and 4 percent inflation as a serious policy question, not a rounding error.
The calculator uses one constant rate, but real inflation bounces around. The United States saw near-zero inflation in 2015, about 8 percent in 2022, and roughly 2 to 3 percent in calmer years. For planning, many people run the calculation at 2, 3, and 4 percent to see a range of outcomes instead of betting on one number.
Inflation also runs at different speeds for different things. College tuition and health care have historically risen faster than overall inflation, while electronics have gotten cheaper. If you are pricing a specific future expense, like tuition in 10 years, consider using a rate above the general inflation rate.
Inflation calculator questions
How do you calculate inflation over years?
Multiply the starting amount by (1 + the annual inflation rate) raised to the number of years. For example, $10,000 at 3 percent annual inflation for 20 years becomes about $18,061, because 1.03 raised to 20 is about 1.806. That tells you prices rose about 81 percent over the period.
What is a good inflation rate to assume for planning?
Many financial planners use 2 to 3 percent for general expenses, matching the Federal Reserve's long-run target of about 2 percent. For expenses that historically outpace inflation, like college or health care, 4 to 5 percent is a common planning assumption. Run several rates to see a range instead of a single point estimate.
What is the difference between inflation and purchasing power?
Inflation describes prices going up; purchasing power describes what your money can buy. They are two views of the same math. At 3 percent annual inflation for 20 years, the price level rises about 81 percent, which is identical to saying each original dollar retains about 55 cents of purchasing power.
Does the inflation calculator account for taxes or investment returns?
No, it isolates the inflation effect so you can see it clearly. For investment planning, compare returns against inflation: economists call the difference the real return. Roughly, a 7 percent investment return with 3 percent inflation leaves about 4 percent of real growth. Taxes and fees reduce it further.