How Does Inflation Affect Your Money?
Enter an amount, an annual inflation rate, and a number of years. Switch between Future Value — what today's money buys later — and Historical Equivalent — what a past amount equals today.
How the calculator works
Future Value shows how much purchasing power erodes over time. The formula is: adjusted = amount ÷ (1 + rate)^years. At 3% annual inflation, $1,000 today buys only about $744 worth of goods in 10 years.
Historical Equivalent shows what a past amount equals in today's money. The formula reverses: adjusted = amount × (1 + rate)^years. A salary of $50,000 from 20 years ago at 3% average inflation equals roughly $90,000 today.
Inflation examples
Moderate inflation
$10,000 · 3% · 10 years
$7,441 future value
−25.6% purchasing power
High inflation
$10,000 · 7% · 10 years
$5,083 future value
−49.2% purchasing power
Historical equivalent
$50,000 · 3% · 20 years ago
$90,306 today
+80.6% in nominal terms
Frequently asked questions
What is the average rate of inflation?
In the United States, the Federal Reserve targets 2% annual inflation. Actual rates have varied: inflation averaged around 2–3% through the 2010s, then spiked to over 9% in mid-2022 before returning to lower levels.
How does inflation reduce purchasing power?
At 3% annual inflation, prices roughly double every 24 years (using the Rule of 72). A basket of goods costing $100 today will cost about $134 in 10 years. Your money buys less each year unless it grows faster than inflation.
What is the difference between future value and historical equivalent?
Future Value mode shows what today's money will be worth in N years at a given inflation rate — purchasing power erodes. Historical Equivalent mode shows what a past amount equals in today's money — useful for comparing salaries or prices across decades.
How can I protect my savings from inflation?
Common strategies include investing in equities or real estate (which historically outpace inflation), using inflation-linked bonds such as TIPS, keeping savings in high-yield accounts that match or exceed the inflation rate, and diversifying into foreign assets.
Why does the calculator use a manual rate instead of real CPI data?
CPI data is country-specific and updated monthly. A manual rate lets you model any scenario — past US inflation, current EU rates, or a worst-case rate for planning. Enter the current CPI rate for your country to get an accurate estimate.
Disclaimer: For informational purposes only. This calculator uses a fixed annual rate and does not account for variable inflation, taxes, or investment returns. Consult a qualified financial adviser for personal planning.