Inflation Calculator
How This Calculator Works
Adjusted Amount = Original Amount x (CPI_end / CPI_start)
Cumulative Inflation Rate = ((CPI_end - CPI_start) / CPI_start) x 100
Average Annual Rate = ((CPI_end / CPI_start)^(1/years) - 1) x 100
Buying Power Change = ((Original - Adjusted) / Adjusted) x 100
Where:
CPI_start = Consumer Price Index for the start year
CPI_end = Consumer Price Index for the end year
years = Number of years between start and endThe inflation calculator uses historical Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics to show you exactly how the purchasing power of money has changed over time. You can use it to answer questions like "What would $100 in 1970 be worth today?" or "How much has my salary kept up with inflation?"
What Is the Consumer Price Index?
The CPI (specifically the CPI-U, or Consumer Price Index for All Urban Consumers) is the most widely used measure of inflation in the United States. It tracks the average change in prices paid by urban consumers for a market basket of goods and services, including food, housing, apparel, transportation, medical care, recreation, education, and communication. The BLS surveys prices for about 80,000 items in 75 urban areas each month to compute the CPI.
The CPI uses a reference period of 1982-84 = 100. This means a CPI value of 314 (approximately the 2024 value) indicates that prices have roughly tripled since the early 1980s. The percentage change in CPI between any two periods represents the inflation rate for that time span.
How the Calculation Works
To calculate the inflation-adjusted value of a dollar amount, the calculator divides the CPI of the end year by the CPI of the start year and multiplies by the original amount. For example, to find what $1,000 in the year 2000 (CPI: 172.2) is equivalent to in 2024 (CPI: 314.2): $1,000 x (314.2 / 172.2) = $1,824.62. This means you would need $1,824.62 in 2024 to have the same purchasing power as $1,000 in 2000.
The cumulative inflation rate is the total percentage increase in prices over the period. The average annual inflation rate is computed using the compound annual growth rate formula, which accounts for the compounding effect of inflation year over year. The buying power change shows how much less your original amount can purchase in today's dollars.
Custom Inflation Rate
If you want to project future values or model hypothetical scenarios, toggle on the custom inflation rate option. This uses a constant annual rate you specify instead of historical CPI data. This is useful for financial planning — for example, projecting how much $50,000 in savings will be worth in 20 years assuming 3% annual inflation (answer: the purchasing power drops to about the equivalent of $27,684 in today's dollars).
Reading the Chart
The line chart shows how the nominal value of your specified amount changes over the selected period. Starting from your original amount in the start year, the line rises to show how much money you would need in each subsequent year to match the purchasing power of the original amount. A steeper line indicates faster inflation. You can observe periods of high inflation (like the 1970s-early 1980s) as particularly steep sections of the curve.
Historical Context
This calculator covers over a century of US price history, including the deflation of the early 1920s and 1930s, the wartime inflation of the 1940s, the relative stability of the 1950s-1960s, the Great Inflation of the 1970s, the long period of moderate inflation from 1983-2020, and the post-pandemic inflation surge of 2021-2023. Understanding these patterns helps put current inflation in historical perspective.
Frequently Asked Questions
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What You Should Know
Inflation and Your Financial Future
Inflation is often called the "silent tax" because it gradually erodes the purchasing power of your money without any visible transaction. Understanding inflation is not just an academic exercise — it has profound implications for your savings strategy, retirement planning, salary negotiations, and investment decisions.
The Rule of 72
A quick way to estimate how long it takes for prices to double is the Rule of 72: divide 72 by the annual inflation rate. At 3% inflation, prices double roughly every 24 years. At 7% inflation (as experienced in the 1970s), prices double in just over 10 years. This means a retiree who stops working at 65 with a fixed income should expect their cost of living to roughly double by age 89 at historical average inflation rates.
Salary and Inflation
When your employer gives you a 3% annual raise, you may feel like you are getting ahead — but if inflation is also 3%, your real purchasing power has not changed at all. To actually improve your standard of living, your salary increases need to exceed the inflation rate. This is why understanding the difference between nominal wage growth (the raw percentage increase) and real wage growth (the increase after accounting for inflation) is so important for evaluating your financial progress over time.
Inflation and Debt
Interestingly, moderate inflation can actually benefit borrowers with fixed-rate debt. If you have a 30-year fixed-rate mortgage, inflation means you are repaying the loan with dollars that are worth less than when you borrowed them. Your fixed monthly payment becomes easier to afford as your income (presumably) rises with inflation, while the payment stays the same. This is one reason why fixed-rate debt is generally preferred over variable-rate debt in an inflationary environment.
Planning for the Future
Financial planners typically assume 2-3% annual inflation when projecting future needs. If you want to retire with the equivalent of $50,000 in today's purchasing power and retirement is 30 years away, you will need about $121,000 in nominal terms at 3% inflation. Use this calculator with the custom rate option to model different inflation scenarios and ensure your savings and investment plan accounts for the inevitable erosion of purchasing power over time.