Inflation Calculator

Calculate how inflation affects the purchasing power of money over time. Understand how much your money will be worth in the future or what past amounts are worth in today's dollars.

Inflation Parameters

Amount ($)

Start Year

End Year

Annual Inflation Rate (%)

Common Inflation Rates

Inflation Impact

Future Value (2024)

$2,129.67

Purchasing Power Loss

$1,129.67

(113.0% decrease)

Total Inflation

113.0%

Over 24 years

Average Annual Inflation

3.20%

Year-by-Year Breakdown

2000$1,000.00

2001$1,032.00

2002$1,065.02

2003$1,099.10

2004$1,134.28

2005$1,170.57

2006$1,208.03

2007$1,246.69

2008$1,286.58

2009$1,327.75

How Inflation Calculation Works

Inflation reduces the purchasing power of money over time. This calculator uses the compound inflation formula to determine how much money will be worth in the future or what past amounts are equivalent to in today's dollars.

Formula

Future Value = Present Value × (1 + Inflation Rate)^Years

Future Value: The equivalent amount in future dollars

Present Value: The current amount of money

Inflation Rate: Annual inflation rate as a decimal

Years: Number of years between start and end dates

Understanding Inflation

What is Inflation?

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. When inflation occurs, each unit of currency buys fewer goods and services than it did before.

Historical US Inflation Rates

• 1970s-1980s: High inflation (6-13%)
• 1990s-2000s: Moderate inflation (2-4%)
• 2010s: Low inflation (0-2%)
• Long-term average: ~3.2%

Impact on Different Assets

Negatively Affected

Cash, bonds, fixed deposits

Potentially Protected

Real estate, stocks, commodities

Example Calculation

What $100 from 2000 is worth in 2024

Given:

• Initial amount: $100
• Start year: 2000
• End year: 2024
• Average inflation: 2.5%

Result:

• Future value: $184.85
• Purchasing power loss: $84.85
• Total inflation: 84.9%
• $100 in 2000 = $184.85 in 2024

Frequently Asked Questions

What causes inflation?

Inflation can be caused by increased demand for goods and services, rising production costs, expansionary monetary policy, or supply chain disruptions. It's a complex economic phenomenon influenced by multiple factors.

How can I protect against inflation?

Consider investing in assets that historically outpace inflation, such as stocks, real estate, or inflation-protected securities (TIPS). Diversification and maintaining some exposure to growth assets can help preserve purchasing power.

Is deflation the opposite of inflation?

Yes, deflation is when prices generally decrease over time, increasing the purchasing power of money. While this might sound good, deflation can indicate economic problems and can be harmful to economic growth.