What the calculator does
Inflation is the rate at which prices rise, and therefore the rate at which a fixed amount of money buys less. This calculator applies a flat annual rate: Future cost = amount × (1 + rate)^years, and Past value = amount ÷ (1 + rate)^years. It also runs backwards from two prices to the average rate between them: rate = (later ÷ earlier)^(1 ÷ years) − 1.
For a precise historical comparison — what $100 in 1985 is in today's dollars — the official route is the consumer price index (CPI), which records actual price changes month by month. The Rate tab reproduces that as an average; the tables here use round rates to show the mechanics.
| After | At 2% | At 3% | At 4% | At 6% |
|---|---|---|---|---|
| 1 years | $1,020.00 | $1,030.00 | $1,040.00 | $1,060.00 |
| 5 years | $1,104.08 | $1,159.27 | $1,216.65 | $1,338.23 |
| 10 years | $1,218.99 | $1,343.92 | $1,480.24 | $1,790.85 |
| 20 years | $1,485.95 | $1,806.11 | $2,191.12 | $3,207.14 |
| 30 years | $1,811.36 | $2,427.26 | $3,243.40 | $5,743.49 |
| 40 years | $2,208.04 | $3,262.04 | $4,801.02 | $10,285.72 |
Purchasing power: the same thing seen from the other side
If prices rise 3% a year, a $1,000 bill kept under the mattress buys 3% less each year. After 20 years it buys what about $554 buys today. Anyone holding cash, a fixed pension or a bond with a fixed coupon is exposed to this; it is the reason a 'safe' return below inflation is a loss in real terms.
| After | At 2% | At 3% | At 4% | At 6% |
|---|---|---|---|---|
| 1 years | $980.39 | $970.87 | $961.54 | $943.40 |
| 5 years | $905.73 | $862.61 | $821.93 | $747.26 |
| 10 years | $820.35 | $744.09 | $675.56 | $558.39 |
| 20 years | $672.97 | $553.68 | $456.39 | $311.80 |
| 30 years | $552.07 | $411.99 | $308.32 | $174.11 |
| 40 years | $452.89 | $306.56 | $208.29 | $97.22 |
How fast prices double
The rule of 72 gives a quick estimate: divide 72 by the rate to get the years until prices double (72 ÷ 3 = 24 years). The exact figure is ln 2 ÷ ln(1 + rate). The table also shows how much of a fixed amount's value is gone after ten years.
| Inflation | Prices double in | Value lost in 10 years |
|---|---|---|
| 1% | 69.7 years | -9.5% |
| 2% | 35.0 years | -18.0% |
| 3% | 23.4 years | -25.6% |
| 4% | 17.7 years | -32.4% |
| 5% | 14.2 years | -38.6% |
| 7% | 10.2 years | -49.2% |
| 10% | 7.3 years | -61.4% |
What rate to use
The US Federal Reserve targets 2% a year, measured by the PCE index. Actual CPI inflation has averaged about 3.2% a year since 1913, about 2.6% over the last 30 years, and spiked to over 9% in 2022 before falling back toward 3% in 2024–25. For planning a few years out, 2.5–3% is a reasonable central case; for stress-testing a retirement plan, run 4%. Specific categories — healthcare, college tuition, housing in some cities — have run well above headline inflation for decades, so use a higher rate for a goal that depends on one of them.
| Period | Average rate | Note |
|---|---|---|
| 1913–2025 | ~3.2% | About $32 in 2025 for $1 in 1913 |
| 1970s | 7.1% | Prices doubled in the decade |
| 1980s | 5.6% | |
| 1990s | 3.0% | |
| 2000s | 2.6% | |
| 2010s | 1.8% | Lowest decade since the 1930s |
| 2020–2024 | 4.2% | Peak of 9.1% year-on-year in June 2022 |
Inflation in financial planning
Two figures with the same nominal value years apart are not comparable until one is adjusted. In practice this means: a retirement income target set in today's dollars must be inflated to the year you retire; an investment return must have inflation subtracted to give the real return that measures growth in buying power (roughly nominal − inflation, exactly (1 + nominal) ÷ (1 + inflation) − 1); and a salary that rises less than inflation is a pay cut. The investment and retirement calculators on this site include an inflation input for exactly this reason.
- Real return ≈ nominal return − inflation.
- Inflate a future goal from today's price: goal × (1 + inflation)^years.
- Deflate a future balance to today's value: balance ÷ (1 + inflation)^years.
- A fixed payment loses (1 − 1 ÷ (1 + inflation)^years) of its value over the period.
Limits of a flat-rate estimate
Inflation is not constant — the 1970s averaged 7% and the 2010s under 2% — so a flat rate is a planning assumption, not a forecast. The official CPI measures a basket of goods for an average urban household; your personal inflation rate depends on what you buy. Housing and healthcare weigh heavily for some households, and their prices have generally risen faster than the average. For historical questions, look up the CPI values for the two years and use their ratio; the Rate tab then gives the equivalent average rate.