Inflation Calculator

What is inflation?

Inflation is the rate at which prices rise over time, eroding the purchasing power of money. If inflation is 3% per year, what costs $100 today will cost about $103 next year — and $181 in 20 years. The same $100 bill, kept under a mattress, would buy roughly $55 worth of goods in today's money after those 20 years.

The inflation formula

Future Value = Today's Value × (1 + inflation rate)^years

At 3% annual inflation, $10,000 today becomes $18,061 in 20 years — meaning you'd need $18,061 then to buy what $10,000 buys now.

Why inflation matters for your savings

If your savings earn less than the inflation rate, you're losing money in real terms. This is why "safe" options like a 0% checking account can be risky over long periods. To stay ahead:

• High-yield savings: currently 4–5% APY (roughly matches inflation)
• I Bonds / TIPS: government bonds designed to track inflation
• Stocks: historically return 7–10% (well above inflation)
• Real estate: property values and rents tend to rise with inflation

U.S. inflation history

• Long-term average: ~3% per year
• 2010–2019 (low inflation era): ~1.8% per year
• 2022 (peak): 9.1% (highest in 40 years)
• 2026 (current): ~3% (returning toward normal)

The Federal Reserve targets 2% inflation as "healthy." Periods of high inflation (5%+) historically cause economic strain and tend to be followed by aggressive interest rate hikes.