# Free inflation calculator

> Enter an amount, an inflation rate, and a number of years to see the equivalent purchasing power — either in the future or back in the past.

Find out what a dollar amount from today is worth in the future, or what a future amount is worth in today's dollars, using any annual inflation rate.

**Interactive version:** https://onlinecalculator.me/finance/inflation/
**Category:** Finance

## How to use

1. Choose **Forward** to find what today's money is worth in the future, or **Backward** to find the present-day equivalent of a future or historical amount.
2. Enter the dollar amount you want to adjust.
3. Set the annual inflation rate — 3.1% is the US historical average; adjust for your scenario.
4. Enter the number of years.
5. Read the equivalent amount, total inflation percentage, and purchasing power change.

## The formula

Forward (present to future):

```
FV = PV × (1 + r)^n
```

Backward (future to present):

```
PV = FV / (1 + r)^n
```

Where `r` = annual inflation rate as a decimal, `n` = years.

Purchasing power loss (forward):

```
loss% = (1 - 1 / (1 + r)^n) × 100
```

## Worked example

$1,000 today at 3.1% annual inflation over 10 years:

- Factor: (1 + 0.031)^10 ≈ 1.3579
- Equivalent in 10 years: **$1,357.90**
- Total inflation: **35.79%**
- Purchasing power loss: **26.36%** (your $1,000 buys only about $736 worth of today's goods)

## Notes

- This calculator uses a constant annual rate. Real inflation fluctuates year to year; the result is an estimate based on your chosen rate.
- The CPI measures a broad basket of consumer goods. Specific categories (housing, healthcare, education) often inflate faster than the overall index.
- For retirement planning, use a real return (nominal rate minus inflation) to size your portfolio in today's dollars.

## Frequently asked questions

### How is inflation calculated?

The calculator uses the compound inflation formula: FV = PV × (1 + r)^n, where PV is the starting amount, r is the annual inflation rate as a decimal, and n is the number of years. This is the same method used by the Bureau of Labor Statistics CPI calculator.

### What is the historical US inflation rate?

The long-run average US inflation rate since 1913 is approximately 3.1%, based on the Consumer Price Index (CPI) tracked by the Bureau of Labor Statistics. Recent years have seen higher rates — 2021 through 2023 averaged above 5% — so the default of 3.1% is a conservative long-run estimate rather than a current forecast.

### What is the difference between forward and backward mode?

Forward mode answers: "If I have $1,000 today, what will I need in 10 years to buy the same things?" Backward mode answers: "What would $1,000 from 10 years ago be worth in today's dollars?" Both use the same formula — backward mode simply divides instead of multiplies.

### How should I use this calculator in financial planning?

Use forward mode to stress-test savings and retirement projections — a 3% rate roughly halves purchasing power every 24 years. Use backward mode to put historical prices in context (for example, what did $100 in 1980 really buy?). For investment planning, subtract your expected inflation rate from your expected nominal return to find your real return.

### How do I share my inflation scenario?

Press "Share with my numbers" to copy a URL that pre-fills the amount, rate, years, and direction. Anyone opening it will see your exact scenario.

## Sources

- [CPI Inflation Calculator](https://www.bls.gov/data/inflation_calculator.htm) — U.S. Bureau of Labor Statistics
- [Inflation](https://en.wikipedia.org/wiki/Inflation) — Wikipedia

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- [Compound interest calculator](https://onlinecalculator.me/finance/compound-interest/) — See how a lump sum or regular contributions grow with compounding over time.
- [Retirement calculator](https://onlinecalculator.me/finance/retirement/) — Project a retirement nest egg and estimate how long it will last.

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